In the last week or so it seems I get more questions about Toyota from readers than I do requests for sweets from my children. Whether it’s about the sticking accelerator recall, the Prius braking issue, the five-speed automatic transmission software maladies, or the effect of all these on Toyota’s long-term health, there is no lack of interest out there in getting good answers.
There are two big factors at play that the evening news and even automotive magazines don’t want to talk about (and, of course, I will). The first has something to do with the demographics and psychographics of Toyota and Lexus buyers — they aren’t, on average, “car people”. Indeed, I’ve long referred to Toyotas and Lexus vehicles as “cars for people who don’t like cars”. Obviously this is a gross generalization, as I’m a die-hard car guy and when I’m not piloting something stupid like a Corvette, Ferrari, Triumph, or old truck, I’m driving my kids to school in an ’06 Avalon. The prime market for Toyota, however, has been people not looking for a vehicle for fun or to fulfill an ego need, but rather as a safe, reliable, ergonomic appliance to get them reliably and economically from point A to point B.
Consequently, Toyota and Lexus owners generally don’t have a good understanding of automotive technology and/or history from which to draw conclusions regarding the current issues. While the Toyota (and especially Lexus) ownership group compares well to competitors’ in terms of academic and professional success, these are not people who are going to research issues within context of the industry. They just want to know a) if there is a problem that affects them, b) if it does when it can be fixed, and c) if the car is safe to drive until said solution can be implemented. If any part of the explanation isn’t clear…which it has not been, then the problem is compounded.
This is just half of Toyota’s dire big picture situation, though.
The other factor is that Toyota and Lexus have reached leadership positions in their respective classes based almost entirely on the image of quality. People haven’t been buying Camrys, Siennnas, ES350s, or Highlanders for their speed, luxury, handling, or sex appeal. Hell, even the Lexus LS series has been developed as a reliable, lower-cost alternative to Mercedes S-Class (with derivative styling, to boot).
So in the absence of this core value proposition, consumers have no reason to buy a Toyota or Lexus.
Talking heads have put blame all over the place — from design failure on the part of the OEM pedal supplier to an internal management structure overwhelmed by far too rapid market growth. Based on my traditional business education and years in management, I’d call these knee-jerk catch-all diagnoses (like “spastic colon” or “irritable bowel”) rather than meaningful analysis of strategic and tactical failures.
There are tremendous challenges for Toyota going forward. First, they have to identify what is actually causing all of the accelerator and braking issues in its cars, then they have to figure out how to actually fix millions of cars quickly.
Next they have to identify the source of the product management issues that led to the failures. In modern times quality is defined as the failure rate engineered into any given component, because while it is possible to make anything fail-safe, the cost to do so is unreasonable from a business case standpoint. That said, an analysis needs to be done for each failure of how the culprit system was engineered and if the malfunction can find a causal or associative relationship with a specific benefit like increased profit, better mpg, use of a preferred business supplier.
Most importantly, Toyota has to fix the self-inflicted damage done to its reputation…and it better start really quickly. Obviously this begins with solving these issues in all of its vehicles, but it also needs to include the shortcomings in its problem-reporting process, which according to Toyota Media Manager Bill Kwong completely and entirely disregards third-party collected information, even if it is a consumer complaint site with thousands of confirmed, actionable reports. Toyota will only consider and act on information reported from dealers via district managers and from the miniscule percentage of owners who use the toll-free Toyota Customer Service hotline.
Finally, what nobody else has brought up (so allow me to do so), is that Toyota must then move beyond marketing one-trick ponies. One can’t sell only on the basis of quality if quality is in doubt. As for the two cars in Toyota’s lineup that aren’t marketed based on quality alone, the Corolla and Prius: I have two words: Chevy Volt. You can’t sell only on gas mileage once these models look like Bugatti Veyrons at wide-open-throttle compared to the Chevy Volt’s 200-mpg.
At the end of the day, the moment the US Secretary of Transportation went on record saying Toyota, with its perceived primary value proposition of quality, not only now suffers severe safety issues across the majority of its product offerings, but also systematically worked to hide the problem from regulators and avoid recalls…well, this is a disaster of Andy Dick at Mardi Gras proportions. Excuses and blocking the truth is something Americans expect from Ford (Pinto and Mustang gas tanks, Explorer rollover issues, fire-starting cruise controls, Crown Vicky stuck accelerators) and GM (side-saddle gas tanks, bad steering and motor mounts in the early 1970s), but not from Toyota.
Actually, it isn’t a disaster for everyone. Ford and GM sales are up. And come to think of it, Audi has to be happy that “unintended acceleration” will no longer be associated only with its brand.
And just like Audi, Toyota can expect to spend millions of dollars and decades of time to repair the damage to its reputation. Might we suggest taking a page from Audi’s book and engineer in performance, design, ergonomics, image, luxury…and also quality. If there’s one thing that Land Rover and Fiat have proven time and time again, people will buy the least reliable vehicles on the market, provided said vehicle offers more to the driver than the perceived or actual quality of its parts.