More bad news for the Big T: The floormat issues just won’t go away, and Toyota has initiated or expanded its recalls to cover 2.17 million more Lexus and Toyota vehicles.
Earlier this month, the company was absolved of blame by NHTSA, which declared it found no fault with Toyota’s electronic throttle systems causing unintended acceleration. But apparently the floormats in some cars can still entrap gas pedals.
This is a big blow to a company whose U.S. market share dropped from 17 percent in 2009 to 15.3 percent last year. Company profits also declined—39 percent—to $1.1 billion in the last financial quarter. At the same time, GM announced yesterday that it earned $4.7 billion in 2010, its first profitable year since 2004.
In the present dog-eat-dog car world, reputation for quality counts more than ever. GM’s is on the upswing; Toyota’s just took another hit.
But it seems that no company, in these quality/safety-conscious times, can afford to be lax about what they put on the street. Ford announced yesterday it was recalling 144,000 F-150 pickups, the company’s bread and butter, for an airbag flaw. But NHTSA asked Ford to recall some 1.3 million trucks, and the company’s action may or may not be sufficient to resolve the problem and appease the Feds.
Toyota learned its bitter lesson in the 15-million-odd recalls last year and the nearly $50 million it paid in fines. Ford seems to be rather behind the curve.
I think the public relations value, or impact, of these recalls on auto companies is very powerful and yet hard to measure. You can’t do it by sales or profits alone. If someone buys a Cruze instead of a Corolla, is it because the Cruze is perceived as a better car or because the buyer is worried about Toyota quality control?
All the focus groups in the world won’t provide dependable, predictable answers to those kinds of buyer-behavior questions.
Has Toyota quality taken yet another hit, or is the company showing that it’s on top of its problems?