Recalls threaten to dent Toyota's global image

Automaker forced to fix glitches in 4m cars, 110,000 Tundra trucks

Tokyo: The largest recall in Toyota Motor Corp history probably will put a serious dent in the Japanese automaker's pocketbook. But the hit to Toyota's image could prove even more damaging.

The company's reputation as a builder of reliable, trouble-free vehicles has been tarnished by a series of quality problems, including the recall of more than 4 million Toyota and Lexus cars and light trucks to fix a defect that could cause runaway acceleration. On Wednesday, Toyota unveiled a plan to fix the problem that ultimately could cost hundreds of millions of dollars.

Also last week, Toyota said it would recall 110,000 Tundra pickup trucks because excessive rust on the frames could cause the spare tyre to fall into the roadway. Earlier this month, Toyota suffered another blow when none of its vehicles was named a top safety pick in the Insurance Institute for Highway Safety's tests of 2010 model cars and light trucks.

It's a humbling comedown for an automaker that once routinely had the fewest recalls among the six largest players in the US market. In 2000, for example, Toyota recalled only 8,379 vehicles, according to government data.

The quality and safety issues have led some experts to wonder if Toyota's decade of rapid expansion, which enabled it to pass General Motors as the world's biggest automaker, came at the expense of the company's engineering and quality control prowess. Toyota executives have acknowledged that the company needed to get "back to basics".

Nothing else

At risk, some say, is the very trait that made the automaker No 1.

"There's nothing else to the brand," said John Wolkonowicz, an analyst with consultant IHS Global Insight. "It's not built on eye-catching design. It's not built on a cutting-edge driving experience. It's not built on performance. It's built on quality and low cost of ownership."

So far, there's little evidence that the acceleration-related recall, announced on September 29, is driving buyers away from Toyota, which, like its competitors, is suffering through the worst market for auto sales in decades.

"At this point we don't see any connection or any known impact on sales," Toyota spokesman Mike Michels said. But the uncontrolled acceleration problem — the recall covers various model years of eight Toyota and Lexus vehicles — clearly has spooked some customers.

"Until they're able to specifically determine what caused the problem, no one in my family is going to buy one of their products," said David K. Winnett Jr of Torrance, California, who traded his wife's 2007 Lexus IS 250 for a Buick Acadia after she experienced a runaway acceleration incident in early August. "It's just too risky."

Automakers recall millions of cars each year to address various problems. The issues can be life-threatening, such as the defective tyres that led to Ford Motor Co's recall in 2000-01 of millions of Firestone tyres that were sold as original equipment on Explorer sport-utility vehicles.

Trivial

Or they can be trivial. Honda Motor Co recalled more than a million vehicles in 2006 to replace the owner's manuals, which contained an erroneous phone number. The runaway acceleration problem is just the latest in a spate of quality missteps that have plagued Toyota.

In 2005, the automaker had to recall more than 2.3 million vehicles. Among the problems were steering defects in certain pickup trucks and SUVs and a software glitch that could cause some Priuses to stall or shut down. In 2007, Toyota settled a class-action lawsuit filed by customers who complained of oil sludge buildup in their vehicles' engines. And even before last week's Tundra recall, the company had been dealing with complaints that its Tacoma and Tundra pickups were rust-prone.

Two years ago, Consumer Reports magazine — often accused by US automakers of favouring Asian brands over American — suspended its practice of automatically recommending new Toyota vehicles. The action came after the magazine's vehicle testers decided that the brand's dependability history no longer could be relied upon. "Toyota has spent the last five or 10 years concentrating on being the biggest instead of the best, and that's a shame," said Jake Fisher, senior engineer at Consumer Union.

That kind of publicity could erode the price premium that Toyota has long enjoyed in the US because of its reputation for reliability, said Mark Oline, an auto industry analyst for Fitch Ratings.