Recalls dent Toyota's image of reliability

Business Materials 22 October 2007 06:29

Toyota's recall of 470,000 vehicles in Japan announced recently comes as the car industry's most admired manufacturer faces a string of setbacks.

But although large, the recall is by no means massive - nor especially unusual - by industry standards. In August Ford Motor said it was recalling 3.6 million of its cars, pick-up trucks and sport utility vehicles in the US due to problems with speed control deactivation switches.

These, Ford said, might "under certain conditions, leak internally and then overheat, smoke or burn". Last month, Toyota's two biggest Japanese rivals, Honda and Nissan, both announced much smaller vehicle recalls in the US.

Toyota last week said it was recalling its Crown saloon and some other models in Japan for engine, steering and other problems, but said there were no reports of accidents related to the defects.

Larger recalls are always embarrassing for carmakers, who have a habit of communicating the news late on Fridays in hopes they will pass with minimal notice. They also cost carmakers money and cause friction with dealers, who must make available space and time that most would rather devote to selling new vehicles.

For Toyota, which reached its leading position by selling consumers around the world reliable cars, the issue is central to its business.

In an interview with the Financial Times this year, Katsuaki Watanabe, Toyota's president, described the company's quality concerns as nothing less than an "emergency".

The recall caps a rare difficult patch for Toyota, especially in the US - its biggest market - where its reputation for good quality and environmental friendliness have recently come into question.

Last week, the Consumer Reports magazine said it was dropping three Toyota vehicles, including the six-cylinder version of its Camry - America's top-selling car - from its list of recommended vehicles on reliability concerns.

Separately, nine environmental groups are lobbying Toyota to drop its opposition to a draft fuel-economy bill approved by the Senate. The carmaker has also seen three defections of senior executives from its US operation in the last two months. ( Gulf )