Toyota Case Analysis : Toyota Motor Corporation

Toyota has hit the headlines over the years over the defects in several of their models which has sent it on a public relations and safety campaigns relating to its vehicles. Notably is the Toyota safety campaign in North America for certain models of Toyota as well as Lexus brands concerning the floor mat entrapment of accelerator pedals, later on it extended to other models in November 2009.

In 2009 Toyota encountered a public backlash after the discovery of a potentially catastrophic engineering defect among its brand of automobiles including its best-selling Corolla and Camry models. This led to a massive and global recall of approximately 10 million units a year later. The engineering defect caused the models to accelerate out of control and put their drivers and other

It is important that Toyota improve their communication and process of evaluating their parts because if they don’t they risk losing customers and market shares. An improved process would also give them reassures that this issue does not arise again. According to Porter (1996) “Delivering greater value allows a company to charge a higher average unit price; greater efficiency result in lower average unit cost” (p.62). Toyota needs to focus more on quality than quantity. After quality is critiqued then they can continue to grow at a lower rate. If Toyota gives their North American companies power to make decisions than it would be a huge improvement to the companies and less risk of safety issues.

One of the main errors leading to this situation was the fact that ChassisCo didn’t follow on the Toyota principle of giving the bad news up front. Toyota stated with every supplier that they expected a swift alert in case any risks were to arise, in order to tackle root causes and diminish the problems right away. On the same line, Toyota knew that the manufacturing process for the

For my project I have chosen a Toyota Motor Corporation (TMC) – an international automobile manufacturer. In addition, Toyota provides retail and wholesale financing, retail leasing and certain other financial services primarily to its dealers and their customers related to vehicles manufactured by Toyota. The major portions of Toyota 's operations on a worldwide basis are derived from the Automotive and Financial Services business segments. The Company also has an All Other segment, which includes its non-automotive business activities. The most significant of Toyota 's other operations are its information technology (IT)-related businesses and pre-fabricated housing.

As if this weren’t enough, quality problems mounted week after week. Only months later in February 2010, the NHTSA revealed that it had received claims citing another life threatening defect in the break system for the Toyota Prius. More than 400 thousand Prius recalls resulted. In April of 2010, customers reported handling issues in the Lexus brand which resulted in another recall of 9,400 Lexus cars and a “Don’t Buy: Safety Risk” rating from Consumer Reports. Also in April, the company voluntarily recalled Siennas to address a problem with corrosion on a spare tire cable. Later that month, Toyota voluntarily recalled 2003 Sequoia SUVs to improve the stability controls. 2010 Tacomas were also recalled for defective front drive shafts. Once the quality icon, Toyota had hit a really low point; so low that credit

This paper describes various aspects of the Toyota recall issue. It enables to determine the Toyato recall issues, purpose and structure of it. The Toyota recall issue has prompted high criticism in national forums, automotive trade publications and media circles. Three separate recall issue by the Toyota occurred end of 2009 to start of the 2010. First, recall issue was to correct a possible incursion of an incorrect drivers side floor mat into the foot pedal. Second recall issue start after some crashes were presented by floor mat incursion. Last recall issues was a separate recall for hybrid anti-lock brake software. Toyota declared recalls of around 5.2 million vehicles for the floor mat problem and 2.3 million vehicles for

Due to Toyota’s financial greed and unethical practice, vehicles were wrongly equipped with faulty brakes, sticking pedals and poor quality door looks, which caused death of many Toyota customers and hundreds of dollars in damages. When a company like Toyota acts in an ethically questionable manner, it causes the company to lose customers and develop a negative reputation. Customer tend to lose faith in the company and have to look for better service

In 2009 Toyota Motors (TM) posted a net loss of $4.6 billion ("Market watch," 2014). From 2009 to 2011 Toyota encountered a number of factors contributing to their economic downturn. It began with recalling millions of vehicles, for quality related problems, followed by natural disasters hitting northeastern Japan. These disasters wiped out Toyota’s production capabilities (Tabuchi & Vlasic, 2014). While these events were occurring, the cloud of the 2008 global financial crisis was still being felt. This crisis weakened demand in the automotive industry. This weakened demand increased the competitive landscape for all automotive manufactures. This drove down automotive prices and effectively contribution margins (i.e. sold less

We will start the external analysis with the PESTEL analysis of the automotive sector followed by the Porter’s five forces analysis and we will end by having a look at the key competitors and competitor pricing.

The Toyota Motor Corporate failed to respond to the crisis proactively, forced to recall 3.8 million vehicles related to weather floor mat, two months after the crash. “The initial crisis response should be delivered in the first hour after a crisis and be vetted for accuracy” (W. Timothy Coombs, 2007), attorneys and congress were unpleased by methods of use from Toyota. On August 28, 2009, a fatal car collision killed four people from the family who are riding in a Lexus ES-350 on San Diego highway, raised the attentions and forced National Highway Traffic Safety Administration (NHTSA) collaborated with National Aeronautics and Space Administration (NASA) and decided to reopen investigation on Toyota floor mat problem (NHTSA, 2011). Toyota claims the all-weather floor mats were solely at fault, published a letter showing that there is no defect exists in vehicles, “NHTSA also confirms that no defect exists in vehicles in which the driver’s

Toyota has long been regarded as the pinnacle of Japanese innovation, manufacturing quality and an industrial pioneer (Yuanyuan Feng, 2010). In 2009 Toyota faced a lager scale crisis that was rulled to be the result of “malfunctioning floor mats”. This lead to mass recalls on many of their vehicles and the loss of thousands of dollars due to recall costs and legal bills. After more incidents arose it was found that the actual cause of the incidents was malfunctioning gas pedals and the original floor-pan design. In the time of crisis Toyota was blamed for misreading and mishandling the situation resulting in major losses both financially and in their reputation to buyers.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

Toyota has always stressed the importance of environmental care and the reliability on their safe and quality cars. Since 1992 adopted a set of Guiding Principles, focused on “providing clean and safe products

One potential threat for Volkswagen is that Toyota may respond strategically by also cutting its prices. However, given Toyota’s quality problems over the past year, they will not be able to lower prices, as this possibly would create the perception of lower quality.. First and foremost, Toyota needs to ensure it handles its quality problems to its customers’ satisfaction. The auto maker needs to ensure the public perception is that Toyota is being upfront, honest, and responsible in dealing with recalls and the