Although Toyota has taken a media beating in the last few weeks because of two recalls on popular models, In my opinion they will not fall permanently from grace. From Toyota’s initial entry into the American market over 40 years ago with tiny, under powered, sub compact cars they’ve done nothing but refine and build their product line into some of the best and most popular cars in the world with that a powerful sense of brand loyalty and reliability.
When you read all the hype about the damage to Toyota it’s really about the saintly giant among automakers having the unthinkable happen– a mistake, it’s first ever slip up. And you can guarantee the media will always amplify a fall from the top. Yes, Toyota will loose over a billion dollars from these issues and an untold temporary loss of reputation but you need to look at this brand in the context of the other players. GM the once high and mighty global leader fell even more dramatically from grace. In the last two years they were bailed out of complete disaster through one of the largest bankruptcy reorganizations in history, killing their Pontiac line and selling off Hummer and Saab. This along with Chrysler being virtually kicked out of its partnership with Daimler and the complete disappearance of the Saturn brand makes the auto industry look more like a battlefield wasteland than glimmering car show room.
This presses the point that through all these embarrassing recalls Toyota does not exist in a vacuum. Brands exist in parallel to each other in a consumer driven market place. When consumers have choice they still must rank their preferences. In this case Toyota still looks very good compared to GM, Chrysler, Nissan, Kia and even Honda, their closest but smaller rival. Consumers will shift buying habits, temporarily but they will come back to Toyota.
The big winner in the last two years from this disruption in the American auto industry has been Ford. With an ongoing commitment to a quality product both in the U.S. and abroad they’ve actually practiced very much what Toyota has done for years: keep making better quality cars, limit your line, have great styling and focus on customer needs. This, in addition to the Ford’s financial prudence, preventing their need for bailout money resulting in a growing positive reputation among consumers in the U.S. and abroad.
As for Toyota, they are still the same organization and they will recoup from these embarrassing events over time. Wait and see how they turn this slipup into an even higher focus on product quality and an improved customer service.