Toyota Recall Crisis

From the big picture, they could have avoided the crisis in several ways. First is

Toyota was thought to be the best quality car in the 1970s and 1980s but, due to Japanese competition, American car manufactures soon began to close the rankings gap. At the top of their game in 2010, Toyota had to stop manufacturing and order a large recall of automobiles. While leadership was probably considered great at the height of Toyota’s success, changes were obviously needed during the recall period and management needed to be as adaptable to those changing conditions. The only thing regarded as permanent in a market economy is change

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.

Cole, R. E. (2011). What really happened to Toyota? MIT Sloan Management Review, 52(4), 29-35. Retrieved from http://search.proquest.com.library.capella.edu/docview/875531966?accountid=27965

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

During a crisis here at Totoya automotive manufacturer, our goal will be to communicate facts as quickly as possible. We will form a Crisis Response Team at our Regional location, and at all of our manufacturing and sale sites. We will strive to update information as circumstances change, to ensure the safety of the community and the continued operations of automotive manufacturing. We will be mindful of how we communicate in a crisis. Our approach will affect the global reputation of our company operations and vehicles. We realize that in a crisis, people will presume us to have more information than we may actually have. At Toyota,

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

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

Toyota said its quarterly net income fell 18.5% and decline to provide full-year forecast due to flooding in Thailand. Toyota reached its net profit to 13.5 percent to 80.9 billion yen in the last three months of 2011, which occurred in massive disaster of

The purpose of this report is to examine if the reasoning behind well-known car manufacturer, Toyota’s loss of revenue and leading market position is alone as a result of extensive product recalls following a fatal crash of a Lexus ES 350 on August 28th 2009. The journal article, “Toyota Crisis: Management Issue?” (Yuanyuan Feng 2010) provides an outline of the key factors that triggered the 2009 Toyota crisis, and explores whether the fall in the company’s returns by 19% were caused purely as a result of the recall and safety concerns, or something much deeper.

The invention of automobiles had been dated long back in history. From that day till now, it had not only made our lives easier but also simpler. From times back then till now many big automobile companies had came into existence, some of them were successful and some were not, thus going out of market and competition. Among them, Porsche and Volkswagen Group(VW) have emerged as one of the world leaders in automobile industry. Through years of hardwork and sheer use of technology and engineering developments, both of these companies have carved a name for themselves in their respective markets. But sometimes, bad management and several areas of conflict arise between two companies that can lead to its downfall. In this case too the CEO of Porsche, just wanted to administer each and everything according to his own ways and rules, but on the other hand the CEO of Volkswagen, even after facing huge loses wanted to continue on with his strategy because he was quite confident about his strategy and clearly had a broader outlook of the scenario. Therefore, due to having different mindsets, there was a conflict between the ideas of two which led to the decline of one of them. These conflicts can be summed up in the following couple of questions:

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

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.

It has been created also a gap between Image and Vision. After the crisis Toyota's relationship with its main stakeholders (suppliers, national and international customers, employees, dealers and investors) was not so strong as before, because it was loosing its reputation. The investors and the suppliers were complaining because recalling million of vehicles, and the customers were disappointed because they were not receiving what they expected.

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