“Toyota, I Appreciate What You Do For Me! Moving Forward! has replaced the formerly well-known brand’s old catchphrase, which stood for quality, dependability, and a good customer experience. Toyota has been working to regain consumer trust and brand equity ever since the company’s largest-ever recall of vehicles in the United States in 20092010. One of the biggest automakers in the world faces a challenging problem. Is it effective?
Toyota has a long way to go before it can reclaim its pre-recall popularity, according to consumer attitudes about the Toyota brand as determined by GfK MRI’s Starch Advertising Research Brand Disposition.
Prior to Toyota’s historic recall in November 2009, Starch discovered that more than 75% of U.S. adults surveyed had a favorable opinion of the company, while only 1 in 5 (17%) had a negative opinion. These statistics unequivocally demonstrate that most consumers had a great deal of faith in the Toyota brand.
Toyota recalled 3.8 million vehicles on November 2, 2009 due to floor mats that got caught under the accelerator pedals. Four weeks later, Toyota recalled an additional 400,000 vehicles. Four persons lost their lives in an automobile accident in August 2009, which led to these recalls. Consumer perceptions of Toyota started to alter as a result. Positivity about a brand dropped five points to 78 percent. Negative brand sentiment increased by five points to 22%.
However, Toyota was still conducting recalls. Following customer complaints, Toyota recalled millions of more vehicles on January 21, 2010, and another million or so three weeks later due to issues with accelerator pedals sticking in vehicles without floor mats. Then, from February to April 2010, Toyota recalled other automobile models due to a variety of issues, including potential brake issues with Camrys, front propeller shaft issues with Tacoma pickups, and corrosion of spare-tire carriers in Sienna minivans.
After this second significant recall in January 2010 and subsequent recalls through April 2010, according to Starch data, consumer satisfaction with the Toyota brand fell by a further 19 points to 59 percent. Negative attitudes among consumers increased by 19 points to 41%.
Toyota’s new tagline is “Moving Forward!” in an effort to convey to customers the company’s intention to start over and move toward a better future after these traumatic recalls. But are people purchasing it? According to starch statistics, they are, although slowly. Consumers’ favorable opinion of Toyota recovered 11 points (to 70%) between May 2010 and December 2011 in response to the second and subsequent recalls. Consumers who were unfavorably inclined decreased by 11 points to 30%. Undoubtedly good news! But compared to pre-recall ratings, the percentage of consumers who have a favorable opinion of the Toyota brand is still lower.
Brand crises aren’t always irreversible, as readers who can recall the unanticipated acceleration issues that the Audi 5000 brand had in the middle of the 1980s would likely agree. After renaming the 5000 model, Audi was able to resume pre-crisis sales levels in the US within around five years. Toyota faces a greater challenge as a result of its frequent and multi-model recalls. However, assuming no new issues arise, the business seems to be on pace to restore its footing through a blend of excellent work and sensible pricing.
In This Article...
How was the recall situation resolved by Toyota?
Additionally, each recall affects 1.7 million automobiles. All 2009 and 2010 Pontiac Vibes, which share the same manufacturing facility as the Toyota Matrix and are mechanically identical, are also impacted.
According to Toyota, the new, revised gas pedals will be installed in recalled vehicles. Owners are encouraged to remove floor mats and contact their neighborhood Toyota dealer with any issues until their car is serviced. Toyota recommends that any driver who notices their car accelerating accidentally shift into neutral, hit the brakes, pull off the road, and turn off the engine. Owners of cars with push-button starters should be aware that, if the car is not in Park, the engine must be turned off by holding the button down for three seconds.
What was Toyota’s response to the crisis?
Toyota’s stakeholder management and communication lacked the proper priorities. Toyota created the SMART business process to respond to client needs fast. Although it was introduced late, introducing a new approach to tackle the crisis concerns was quite effective.
What did Toyota discover following the recall crisis?
The most difficult situation in Toyota’s history began in August 2009 when a dealer installed an all-weather floor mat from an SUV improperly into a loaner Lexus sedan. As a result, the accelerator became stuck, resulting in a tragic, fatal accident. This legendary business, which was associated with safety and quality, was demonized by the American media, the government, and consultants for plaintiff attorneys. Internal memos that disagreed over public relations strategy, for example, were typically unimportant details that became smoking guns that persuaded the press and the public that Toyota vehicles had electronic issues that could cause runaway vehicles and that the company was concealing this from the public.
The government agency in charge of enforcing auto safety laws, the National Highway Transportation Safety Administration (NHTSA), came under fire for being overly lenient toward Toyota. So they responded by becoming enforcers, like any good American group would when under attack. The sharpest critic was Secretary of Transportation Ray LaHood, who claimed that Toyota was “safety deaf and sworn to investigate all Toyota flaws that would put American residents in danger. He received assistance by using NASA taxpayer funds to fund a lengthy 10-month investigation of Toyota electronics.
What did we discover when the report was released on February 8, 2011? that there is absolutely no proof that technical issues in Toyota automobiles might cause sudden, unexpected acceleration. The only factors NASA identified were inadequately installed floor mats and slow-recovering sticky gas pedals. Only one accident involving a loaner Lexus has been reported as being caused by floor mats; in that accident, the dealer used the incorrect floor mat and failed to secure it with the supplied restraining clips. There have been no reports of accidents being brought on by the extremely small number of sticky pedals. The majority of accidents are the result of driver error.
We also discovered that the NHTSA had been aware for some time that the only issues were sticky pedals and floor mats, but they had to proceed with the NASA study in order to persuade members of Congress who insisted that electronics were to blame for sudden acceleration despite the complete absence of any supporting data. For the purpose of NHTSA proving they were correct all along, Toyota’s name was dragged through the mud for more than a year, $1.5 million in taxpayer money was spent, and some of the best minds in American engineering were engaged for ten months.
So who emerged victorious from this disaster? Sensational and speculatively written pieces by journalists received a lot of online traffic. The NHTSA gained widespread recognition, a larger budget, and a reputation for tenacity. Whether the attorneys who are suing Toyota will succeed remains to be seen. The paranoid auto industry that serves American motorists will recall cars at any time. We may all receive some helpful safety policies for how runaway cars are turned off in an emergency “black boxes that document our most current driving behavior. And Toyota experienced a crisis that forced it to think deeply and make significant adjustments to better its ability to respond to consumer concerns. As a result, it is likely to emerge stronger, but it also lost billions of dollars’ worth of value in the process.
At the conclusion of this protracted saga, it is difficult to think that our roads are any safer. To make that happen, we would need to reconsider how the United States approaches safety. The government and the media may take a cue from Toyota’s methodical approach to problem-solving as a first step. Getting all the information requires some patience, followed by the prioritization of issues, the determination of their underlying causes, and the development of remedies based on the actual issues. The NHTSA made a good decision by analyzing the NASA data objectively, coming to the conclusion that there was no evidence of electronics issues in Toyota vehicles, and then turning its attention to the significant issues of distracted driving and pedal misapplication.
Toyota Under Fire was written by Timothy N. Ogden and Jeffrey K. Liker, both professors of industrial and operations engineering at the University of Michigan (2011).
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What financial losses did the recall cause Toyota?
Despite suffering greater losses than anticipated as a result of its global recall and the beginning of a U.S. investigation into its star model, Toyota’s forecast for its current fiscal year is still upbeat.
The automaker anticipates spending around $2 billion or 180 billion yen on the global recall involving faulty accelerator pedals and the ensuing stoppage of sales and manufacturing. Analysts estimated the cost at around $1.1 billion earlier in the week, but they also included the cost of potential future brand damage.
Toyota projects that the loss of sales from the accelerator recall will lower earnings by 70 to 80 billion to 100 billion yen, and that fixing the faulty gas pedals and floor mats will cost an additional 100 billion yen. The Japanese manufacturer already had a 16 percent decline in sales in January, while Detroit’s competitors saw double-digit growth.
As it was working to resolve its gas pedal recall, reports of Prius braking issues started to appear both internationally and domestically. The National Highway Traffic Safety Administration is formally looking into 124 motorist reports of reduced braking performance. On Thursday, the Department of Transportation said that it would investigate Prius brake concerns. There have reportedly been four accidents because of the issue. Japan gave Toyota the go-ahead to look into similar events involving Prius brake issues on Wednesday.
The automobile manufacturer is nevertheless upbeat about its economic year in spite of the safety worries. After losing 437 billion yen the previous fiscal year, Toyota projected a profit of 80 billion yen for the year ending March 31. The automaker has not included any costs for a potential Prius recall in its forecasts, but it is a significant improvement over a previous expectation of a 200 billion yen loss for the entire year.
The third quarter’s net income came to 5.3 trillion yen, up 10.2 percent over the same period the previous year. From a loss of 164.6 billion yen a year earlier, net profit increased to 153.2 billion yen.
Toyota’s American depositary receipts fell 3% to $71.26 in New York on Thursday amid general market weakness.
Was the gas pedal issue resolved by Toyota?
Toyota updated their floor mat recall, affecting the same 3.8 million North American-sold vehicles, on November 25, 2009. Toyota will modify the accelerator pedal, add a brake override mechanism to stop errant acceleration, and swap out the all-weather floor mats with thinner ones.
What led to Toyota’s unexpected acceleration?
Results from a ground-breaking ten-month investigation into potential electronic causes of unintended acceleration in Toyota vehicles were made public by the U.S. Department of Transportation. In response to a request from Congress, the National Highway Traffic Safety Administration (NHTSA) began the study last spring and enlisted NASA engineers with knowledge of computer controlled electronic systems, electromagnetic interference, and software integrity to carry out new research into the possibility that electromagnetic interference or electronic systems contributed to incidents of unintended acceleration.
Toyota automobiles did not have any electronic defects that may provide the huge throttle openings necessary to cause risky high-speed unintended acceleration accidents, according to NASA engineers. Sticking accelerator pedals and a design problem that allowed accelerator pedals to become stuck by floor mats were the two mechanical safety flaws reported by NHTSA more than a year ago, and they continue to be the only known causes of these dangerous unintended acceleration instances. For these two issues, Toyota has recalled approximately 8 million vehicles in the US.
“We enlisted the best and brightest engineers to study Toyota’s electronics systems, and the verdict is in,” said U.S. Transportation Secretary Ray LaHood. Toyota vehicles don’t experience unintended high-speed acceleration for any electronic-based reason.
In order to compile their report, NASA engineers examined more than 280,000 lines of software code as well as the electronic circuitry in Toyota cars for any potential bugs that might lead to an unintended acceleration incident. Toyota vehicle mechanical parts that can cause an unexpected throttle opening were thoroughly inspected and tested by NASA hardware and systems engineers at the Goddard Space Flight Center in Maryland. Engineers from NHTSA and NASA blasted cars with electromagnetic radiation at a specialized facility in Michigan to investigate if such radiation could lead to problems that result in unexpected acceleration. In order to ascertain whether there were any additional mechanical reasons for unintended acceleration and whether any of the test scenarios created during the NHTSA-NASA investigation could actually occur in real-world situations, NHTSA engineers and researchers also tested Toyota vehicles at NHTSA’s Vehicle Research and Test Center in East Liberty, Ohio.
According to Michael Kirsch, Principal Engineer at the NASA Engineering and Safety Center, “NASA found no evidence that a malfunction in electronics caused large unintended accelerations” (NESC).
Despite the fact that NASA and NHTSA have not discovered any new mechanical causes other than sticking pedals and accelerator pedal entrapment for dangerous unintended acceleration incidents in Toyota vehicles, NHTSA is considering taking several new actions as a result of today’s findings, including:
- By the end of 2011, put forward regulations mandating the installation of event data recorders, the standardization of keyless ignition system functionality, and the requirement of brake override systems;
- start an extensive investigation into the security and dependability of electronic control systems;
- Determine whether the positioning and design of the accelerator and brake pedals, as well as driver usage, may be enhanced to lessen pedal misapplication.
The National Academy of Sciences panel now reviewing unintended acceleration and electronic throttle control systems will be briefed by NHTSA and NASA on the papers that were just made public.
“According to NHTSA Administrator David Strickland, although our research with NASA comes to an end today, our effort to protect millions of American drivers continues. ” The fact that automakers launched a record number of voluntary recalls last year is also very encouraging because it demonstrates our ability to collaborate with business to safeguard customers.
NHTSA is investigating if better positioning and designing the accelerator and brake pedals will lessen pedal misapplication, which happens in vehicles throughout the industry, based on objective event data recorder (EDR) readings and crash investigations completed as part of the agency’s report. Further ensuring that brakes can take precedence over the accelerator pedal in emergency scenarios will be the NHTSA’s upcoming rulemaking to require brake override systems in all passenger vehicles. NHTSA will also receive suggestions from the continuing National Academy of Sciences investigation, which will look at unintended acceleration and electronic vehicle controls throughout the whole automobile industry. Along with the NHTSA-NASA inquiry, the NAS study was started in the spring of 2010 and will be completed in 2011.
Toyota issued recalls for almost 8 million vehicles in 2009 and 2010 due to sticky pedal and pedal entrapment issues. As a result of NHTSA investigations into the timeliness of various safety recalls last year, Toyota also had to pay $48.8 million in civil fines. In 2010, automakers voluntarily started a record number of safety recalls across the industry.