Wednesday, January 27, 2010

What Happened to Toyota?

We read shocking news today that Toyota has suspended sales of 8 popular models in the United States due to a problem with the throttles sticking open. The news comes after a series of other indicators over the past two years which have demonstrated slippage in Toyota's once-vaunted quality record. What happened to Toyota, renowned for its exceptional quality? It appears that the rapid growth of the past few years, as other automakers stumbled badly, may have stressed the organization to a breaking point of sorts. Perhaps, too, Toyota has finally hit a point at which certain diseconomies of scale began to become more pronounced. In the automotive business, every executive seems to have bowed at the altar of scale economies for years, yet it seems that many failed to see how powerful diseconomies of scale can be.

What should we watch for as Toyota tries to minimize the damage from this move? First and foremost, it will be critical for Toyota to communicate often, and in a myriad of ways, with consumers to educate them about why they have made this move and how they are fixing the situation. Second, Toyota has to do all it can to expeditiously correct the problem on models already sold. Third, Toyota must have a well-orchestrated campaign for re-launching these models in the United States.

What does the Toyota decision mean for its rivals? At first glance, this news does appear to be very positive for firms such as General Motors and Ford. However, each of the rivals must take great care in their response. After all, they too have their share of quality issues from time to time. Will Toyota set an expectation for suspensions of sales that these rivals will not want to emulate? Will people begin to ask questions about why rivals aren't "taking quality issues as seriously as Toyota did?" In the end, Toyota may have raised the bar for everyone in the industry when it comes to handling quality concerns.

14 comments:

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trxterCaddygeek206 said...

I know what happened to Toyota and I'm not afraid to say it on Your website they Fucked up!!! and that's coming from the heart. good luck fixing something you'll need the next morning for work.

trxterCaddygeek206 said...

Please don't bring up the american auto makers they are so much better in safety, quality, and style.

and so what the stumbled you see that they have gotten back up and started with some of the later models like the all new Buick Lucerne, Chevy Equinox that gets a 22 mpg city and 32 highway that's better than most of Toyota's hybrids. unlike the Toyota Rav4 that only gets 22 city and 28 highway. i don't know about you but i would rather drive at the speed limit then letting my car increase in rapid speeds without my control.
well good luck Toyota owners, and remember switch to american such as GM, Ford, or chysler.

ashley amber said...

Toyotas are designed here, manufactured here and the suppliers and raw materials, again, all from U.S. soil.

Toyota is not concerned about sales this week but in the safety of their customers after the realization of this flaw in the pedal assembly. Nothing was overlooked or hidden, Toyota just did not speak until they knew the exact root cause of the issue, rather than jumping to conclusions and issuing a fix that could end up with more harm.

ashley amber said...

Toyotas are designed here, manufactured here and the suppliers and raw materials, again, all from U.S. soil.

Toyota is not concerned about sales this week but in the safety of their customers after the realization of this flaw in the pedal assembly. Nothing was overlooked or hidden, Toyota just did not speak until they knew the exact root cause of the issue, rather than jumping to conclusions and issuing a fix that could end up with more harm.

ashley amber said...

Toyotas are designed here, manufactured here and the suppliers and raw materials, again, all from U.S. soil.

Toyota is not concerned about sales this week but in the safety of their customers after the realization of this flaw in the pedal assembly. Nothing was overlooked or hidden, Toyota just did not speak until they knew the exact root cause of the issue, rather than jumping to conclusions and issuing a fix that could end up with more harm.

ashley amber said...

Toyotas are designed here, manufactured here and the suppliers and raw materials, again, all from U.S. soil.

Toyota is not concerned about sales this week but in the safety of their customers after the realization of this flaw in the pedal assembly. Nothing was overlooked or hidden, Toyota just did not speak until they knew the exact root cause of the issue, rather than jumping to conclusions and issuing a fix that could end up with more harm.

ashley amber said...

Toyotas are designed here, manufactured here and the suppliers and raw materials, again, all from U.S. soil.

Toyota is not concerned about sales this week but in the safety of their customers after the realization of this flaw in the pedal assembly. Nothing was overlooked or hidden, Toyota just did not speak until they knew the exact root cause of the issue, rather than jumping to conclusions and issuing a fix that could end up with more harm.

Setin Khan said...

9 stuck gas pedals out of 11 million cars isn't a problem, it is a fact to be proud of. As a society we let 5,000 drunk drivers get away with a small fine and a "you better not do it again" every week. What we need is more manufactures like Toyota that when they are faced with a problem take swift and correct action to fix it, and don't ask for gov't hand outs.

orin said...

trxterCaddygeek206, your perception is warped. The PPM defects are only apparent due to the astonishing quality record, and the open policy Toyota sticks to. No US car manufacturer can claim the same. Buy Toyota stock now.

Samuel said...

Toyota reached at top of global automakers list just because of their safety, reliability standards which are maintained for years, Now Toyota facing some problems those may looks small if we compare with the total number of toyota vehicles on road but still they are taking step by halting some models sales and try to fix the problems in all of models is a great decision, wish they will bounce back to number one position.

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David said...

Toyota responded lately but with perfect structure, first they are stop the selling of their troubled vehicles and they supplied enough goods to dealers to deal with issues and started recalling of vehicles by sending invitations to the consumers really this is a best way to deal with issue.

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nevada said...

hmmm i think Toyota given auto industry to a lesson about how to & how not to react to issues, what will going to happened if we ignore the issue at early stages.

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Samuel said...

I didn't see any surprise about this news, but i could say one thing this is the one of the biggest lesson given by the Toyota to auto industry, "do not try to back track your issues" rather face it as early as you can with best possible solutions.

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