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In February 2010 the total number of vehicles recalled worldwide by Toyota crossed the 8 million mark. This caused serious damage to the company’s brand. Years of denying the problem, combined with a failure to respond promptly and effectively when forced to do so, has toppled the company from automotive brand leadership. The brand which was built on safety and quality has lost its core essence. The recalled vehicles had serious defects that put the lives of customers in danger.
Vehicle recalls
- The first recall in September and November 2009 was for floor mats that could trap the pedal.
- The second recall in January, 21, 2010 was for pedals that overtime become sticky, they were hard to depress or slow to pop up when not depressed.
- On the 27th of January 2010 Toyota added 1.1 million vehicles to the original floor mat recall, the two recalls were mostly in the U.S.A and involved more than 6 million vehicles.
- In early February 2010, the car maker announced a further recall of 437 000 vehicles worldwide for the Prius to repair brake problems. About 60 000 Toyota vehicles meant for export from South Africa were part of a recent recall.
Toyota was slow to respond to complaints
Although the first complaints emerged in 2004, Toyota only started reacting in late 2009. Initially Toyota was very dismissive to customers’ complaints. The company thought their vehicles were flawless. Since 2004 it has been very difficult to investigate Toyota because its systems are kept top secret. It always delayed on giving U.S government answers relating to vehicle safety. It took a fatal accident that killed four people in San Diego to jolt the company into action during September.
Rivals swoop in on Toyota’s territory
On top of the January recall Toyota suspended North American sales and production of eight models. This caused serious harm to its brand. Soon after thousands of the car makers customers approached rivals General Motors and Ford. This enticed the rivals to snatch the company’s customers. The rivals took advantage of this situation. General Motors offered Toyota Customers payouts of up to $1,000 or zero percent financing for up to five years if they traded in their Toyota for a GM vehicle. Soon after, Ford offered a similar deal. In addition Ford started buying keywords to ensure their ads pop up in the same locations, or right next to articles in online news sites covering the ongoing Toyota debacle.
Lesson to be learnt
Although slow to respond at first, Toyota has managed to get a couple of things right since the recalls have been announced.
Senior communicators have been Twittering and blogging like crazy to fill the information vacuum and take control of the escalating situation. Websites and call centres have been established with information for worried Toyota customers. And US Chief Operating Officer Jim Lentz talked directly to Toyota drivers in a video posted to YouTube.
The company’s use of social media in this way has enabled it to get its point of view across and reach its customers directly without the filter of the media to editorialise the message. However many is of the opinion that it might be too little too late.
Toyota was ranked the world’s eighth most valuable brand last year, in a study by Interbrand, beating Apple, Disney and Intel. Where will they be in the rankings this year? Only time will tell.
