InHouse in Print
With the 31st Bangkok International Motor Show
With the 31st Bangkok International Motor Show gearing up to kick off this week, it seems apt to turn our attentions to the biggest brand crisis in automotive history – the travails threatening Toyota following the recall of 8.5 million vehicles and suspended sales of eight models in the United States. Can the brand make a swift recovery? These are not some trifling spare parts we are talking about, after all. Acceleration and braking – at the heart of the automaker’s problems - are the very essence of motoring, and few prospects terrify drivers more than that of a car speeding out of control, unable to be stopped.
According to the latest reports, the accelerator and braking defects were design errors in supplier parts, while the faulty braking in hybrid models was caused by a software glitch. Somehow, the problems slipped through the cracks of the fabled “Toyota Way’’ – and did immeasurable harm to the brand’s reputation for safety, quality and precision.
Toyota’s president, Akio Toyoda, bowed and groveled before the public, admitting: “I fear the pace at which we have grown may have been too quick. I would like to point out here that Toyota's priority has traditionally been: first, safety; second, quality; and third, volume. These priorities became confused. We pursued growth over the speed at which we were able to develop our people and our organisation.’’
Just when it seemed the crisis had peaked two weeks ago, California Prius owner James Sikes was all over the airwaves telling of how his hybrid vehicle reached speeds of over 150 kilometers per hour after the accelerator became stuck. Subsequent investigations have seen the Sikes saga discredited as a hoax, but it’s more mud that will stick to the beleaguered brand.
So can a brand recover from a crisis of such dimensions? One is reminded of Audi’s “sudden acceleration’’ recall that was linked to six deaths and 700 accidents in the early 1980s. The upcoming brand saw sales plunge 83 percent over the following five years, and it took another 15 for the brand to fully recover from its problems.
Some observers are predicting an automotive apocalypse and have warned Toyota could face a “lost generation’’ who no longer trust the brand, provoking a brand crisis unequalled in modern times. Several factors point to a prolonged crisis for the carmaker which two years ago pipped General Motors to become the world’s biggest. Most seriously, the recalls point to systemic problems with the “Toyota Way’’, dealing a shattering blow to the brand’s core values of quality and safety. Then there’s the added embarrassment of having to pull a recently begun national “Portfolio’’ campaign created to promote Toyota’s dependability and reliability. Also, it now appears Toyota has known about accelerator problems since 2007 but dragged its feet on the recall. Currently, it is estimated that 44 class-action lawsuits have been filed under standard and federal law in the US. It is estimated that the claims could reach US$3.6 billion. All of which follows a record US$4.6 billion operating loss as a result of the economic crisis.
If Toyota has any hope of recovering from these hammer blows to its reputation and coffers, it must do everything in its power to win back trust, first and foremost. If high placed heads have to roll, so be it – not least that of Akio Toyoda if he won’t – or can’t – engage better with a worried public. His stumbling mea culpa was too little too late and he desperately needs to do better. Everything possible should be done to help consumers affected by the recall, from speedy repairs to provision of free replacement vehicles where necessary. Openness and accountability must now become the order of the day.
Finally, they are going to need one heck of a new campaign to dig themselves out of the hole – one that doesn’t seek to sweep the problems under the carpet but that heralds a new era of honesty. In the words of one ad executive who worked on the Toyota account in the 1990s: “The next voice that they bring to the marketplace is the most critical decision they will ever make.
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