By Norbert Horvath

 

The world’s largest and most profitable auto company has had yet another downfall, and severely bruised the brands name. Since 2005, Toyota has had more than 20 recalls of vehicles for various reasons. Now in 2012 the company has recalled 7.4 million vehicles, their largest recall ever. Analysts are speculating that there will be a financial impact on the recovering brand image.

Previous recalls have ranged from the thousands, to hundreds of thousands, and occasionally the millions. In 2009 there was a highly publicized accident which led to the death of 4 people. Motortrend.com describes the aftermath of the incident:

“October 25 , 2009: The results of an investigation by local authorities and the National Highway Traffic Safety Administration (NHTSA) reveal a set of rubber floor mats designed for the Lexus RX 400 SUV had been placed over the top of the ES 350′s stock carpeted floor mats and that the accelerator pedal had become jammed against them, causing the car to accelerate out of control. NHTSA notes brakes were nearly destroyed on the car and that the accelerator pedal was “bonded” to the floor mat. NHTSA also points out the gas pedal on the car was solidly mounted to its stalk, whereas other vehicles use hinged pedals.” (The Toyota Recall Crisis)

After the investigations lots of blame was still focused towards Toyota. The company made numerous claims that there was no electrical fault in the acceleration pedal and initially did not recall vehicles. In 2002 the company had started using its drive-by-wire system. Since then there has been a jump in unintentional acceleration complaints against Toyota (26 in 2001; 132 in 2002), who also hold the record for the highest number of these types of complaints. A total of 19 deaths were reported since 2002, all linked to faulty and unintentional acceleration. Toyota still defended itself and pointed to the NHTSA investigation results.

After this event Toyota had trouble keeping its brand name up. The company had redesigned many of its vehicles in 2009 which they claimed would alleviate all problems due to faults in the pedal designs and brakes. However the following  year millions of European Toyotas were recalled, and also in 2010 half a million Prius had been recalled because of faulty brakes.  By this point the company had recalled 8.5 million cars worldwide. The company also faced a 16.4 million dollar fine as it was decided they were too slow in recalling vehicles with faulty gas pedals. In the summer of 2010, Lexus recalls had totaled 270,000 worldwide. Jumping forward half a year down the road, February of 2011, 2.7 million cars are recalled yet again for what else, but faulty acceleration pedals. It seems that the company has more things on their mind than to fix this rather serious issue which has gone on for almost a decade. In 2011 NASA and NHTSA reported again that the issue is not an electrical fault but again, floor mats trapping pedals.

2009 and 2010 were tough years for the company, and 2011 was also hard as a result of the earthquake in Japan which created inventory shortages. Now in October 2012, the company had started getting back on top just to suffer a devastating blow. A worldwide recall of 7.4 million vehicles produced since 2005, had been initiated due to faulty window power switches, and analysts are starting to reveal just how bad the large recall is. Toyota has lost its “extreme reliability” factor it once had. The company is seemingly selling cars based on reputation and that is what is being crushed here. With American companies starting to boom back Toyota is slipping away. They lost their number one spot to GM and Ford in terms of sales volume in the U.S.

Don’t count Toyota out yet however. This past September, after the double disaster in Japan and Thailand, the company was still able to bounce back with an astounding 41.5% jump in sales. This was largely due to the sales of the Camry and Corolla. Once one of my favorite car companies, now Toyota seems to have lost its main asset, reputation for reliability. Now we just have to wait and see if and when Toyota will claim the #1 spot in automotive sales again.