Toyota’s Mistake

Posted by Admin | February 6th, 2010

It seems that Toyota has had to recall a number of its models because of a possible “sticky accelerator” problem. They have been lambasted in the media for not acting quick enough to recall the vehicles, too, which is certain to harm their image. Irreparable harm has already been done in the short term–while Toyota used to have an image of perfection and affordability, they’re now being talked about as if they have no standards.

This has been a public-relations nightmare for Toyota, as its brand name has been synonymous with quality and reliability. Crisis management does not get any more woeful than this and the cost of this bungling so far—the initial $2 billion recall and the loss of 17% of share value since Jan. 21, when the gas-pedal recall was announced—is only a down payment on the final tally. The recall will surely expand, including cars produced in Japan. Lawsuits are being filed and an expensive settlement looms. And then there are the idle factories and empty showrooms to account for.

All of this will amount to a great deal of lost business for Toyota.