Toyota's fightsback as problems escalate

| Friday February 12, 2010 00:00

'This whole ordeal has blown up to be a lot larger than Toyota had expected,' observes Manabu Seto of Car Watch Magazine.

Japan's transport minister Seiji Maehara has publically criticised Toyota Motor president Akio Toyoda, insisting he had responded too late to concerns over the brakes on the firm's flag-ship Prius models.

He is not only concerned about consumers developing a new level of scepticism about Japanese firms' supposed superior quality, but also about how trading partners relate to each other at government level.

'Each country needs to consider how to prevent this from becoming a diplomatic problem,' Maehara insists, as he gets ready to meet US ambassador John Roos to discuss Toyota's recalls and to 'exchange views on protecting free markets and strengthening Japan-US relations'.

It is difficult to say whether Maehara, in making such statements, has himself made the recalls a diplomatic issue, or whether his involvement could help to calm the waters. But it is safe to say that the blame game is widening.

Kazutaka Oshima, president of Rakuten Investment Management, meanwhile, seems convinced the US authorities are using Toyota's problems to bolster support at home, both for President Barack Obama's administration and for US carmakers General Motors (GM), Ford and Chrysler.

'For the Obama administration, which is worrying about its falling support rates, the best way of letting off steam about the jobless situation is to target Toyota, which has overtaken the Big Three,' he says.Such criticism is unfounded, others argue.

'There is no evidence that the US government would be so reckless as to try to intentionally harm Toyota to benefit the car company it now owns, GM,' says Michael Auslin at the American Enterprise Institute.

Toyota's luxury brand Lexus was rated the market leader in automotive consultants J.D. Power's 2009 Initial Quality Study, with Toyota itself in seventh place - well above the industry average.

So while there are signs that Toyota may no longer be offering the absolute best quality, its rivals also know that any insistence that they themselves are immune from problems could backfire.

After all, every major carmaker has been hit by large-scale recalls in the past.

So while both GM and Ford are offering additional $1,000 (£640) discounts for Toyota or Lexus drivers who buy one of their cars, neither firm has opted to change their marketing strategies and allow dealers to make direct comparisons with their Japanese rival.

Meanwhile, there are are signs that Toyoda is finally on the front foot, proactively addressing a crisis that could remain a major headache for Toyota for years to come.

'Let me assure everyone that we will redouble our commitment to quality as a lifeline of our company,' he says as he gets ready to travel to the US to defend his company.

'With myself taking the lead, and by keeping to the 'genchi genbutsu' (go and see for yourself) principle, all of us at Toyota will tackle the issue in close co-operation with dealers and with suppliers together.'

It turns out the fight-back is part of a carefully worked out strategy.

'The first thing we have to do is to recall these cars, have them repaired or modified and ensure customers that the car that they have, that they own, is totally OK,' explains Etienne Plas, spokesman for Toyota Europe. 'That's the first thing, the first priority.

'Then in a second step, of course, we will have to work further on rebuilding the trust and the confidence of the customers in our brand.'

Crisis communication experts accept that this represents a good strategy.

But they also point out that, as with the recalls, Toyota should have done it a long time ago. (BBC)