Toyota Recalls Another 1.7 Million Cars

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Toyota is recalling 1.7 million cars worldwide because of possible fuel leaks, only a year after the world's leading car company--in a public relations nightmare--had to recall millions of automobiles because of faulty floor mats and gas pedals linked to unintended acceleration and deaths. The latest recalls are primarily in Japan but also affect the Lexus IS and GS sedans sold in North America. American dealers have been instructed to inspect cars for loose fuel-pressure sensors that could cause leaks.

Does this latest wave of recalls indicate that the Japanese automaker has learned to swiftly disclose and address safety problems? Or does it signal that Toyota's cars--once-touted for their quality--are increasingly shoddy?

  • Something's Fishy, notes The Economist's Asia View blog. Suspiciously, the recall doesn't involve one model (21 are affected), one part (problems range from fuel-pressure sensors to spare-tire carriers), one time period (dates range from 2000-2009), or any reported accidents or injuries. So, what's going on?

One likely scenario is that the company simple chose to bundle together a gaggle of ordinary product hiccups into a giant, omnibus pre-emptive recall. It may be overcompensating for having under-reacted a year ago ...

If the current problems fit any pattern, it might be the same as last year's lesson: Toyota's growth came at the expense of proper surveillance of its supply chain. There used to be more than 30,000 parts in a car and Toyota excelled at putting them together; now there are around 5,000 modules from many different suppliers.

  • Toyota's Growth Has Jeopardized Its Future, states Douglas McIntyre at 24/7 Wall St. Toyota honed a reputation for quality cars over three decades and, with its Prius hybrid, is considered an innovator in the industry, he explains. But the company has compromised the quality of its cars by building manufacturing facilities throughout the world that are difficult to monitor. The Japanese automaker "might as well recall all the vehicles it has made in the last five years and inspect them," McIntyre concludes. "It would allow Toyota to get out in front of inevitable future problems."
  • Actually, Toyota's Promoting Transparency, suggests The Blog About Cars: "It makes a very nice change to see a car manufacturer making moves to ensure the safety and quality of their cars. Perhaps that is Toyota's approach now--by being open and honest about ... potential faults they may be aiming to build up their reputation as a reliable manufacturer once again."
  • This Recall Won't Hurt Toyota Much, argues crisis-management specialist Eric Dezenhall, as quoted in The Wall Street Journal. He says Toyota's reputation is in good shape because the company has been cultivating its relationship with loyal customers since last year's recall and because the new recalls don't involve injuries. He says Toyota should simply urge its customers take their vehicles in for repairs. Other specialists cited by the Journal disagree, arguing instead that Toyota should increase its spending on Super Bowl ads or trot out Toyota President Akio Toyoda for a news conference.

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