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The Persuader

My personal blog, started in 2006.



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06.02.2010

Toyota’s troubles stem from forgetting its principles

I was surprised to learn that Toyota still has not issued a worldwide recall of its troublesome Prius NHW30 model, even though one had gone out in New Zealand.
   In layman’s terms, the brakes allegedly don’t work when you want them to. In more complex terms, the software has trouble distinguishing between different types of braking, and drivers may experience a delay in ‘pedal feel’.
   I was always a bit sceptical about the recalls over the unintended acceleration, given that the last time I heard those words, they were in relation to a falsified report from CBS’s 60 Minutes, a show known to me for making up stories (Killian memoranda, anyone?). Hearing them again, I thought it was just another excuse for the clumsy driving of a few individuals who couldn’t figure out where the accelerator was (which was what happened with Audi in the US). But it seems this matter has been around for a long time, and recalls were being done even last year.
   But the Prius matter, something that has not come under a global recall, appears more serious than carpets getting in the way, which is the problem behind the unintended acceleration complaints. AFP reports:

The Transport Ministry has received some 80 complaints in February about malfunctions in the brake system of the latest model of the flagship Prius, the Tokyo Shimbun reported without quoting sources.
   Five of them were actual crashes in which the drivers claimed the brakes did not work properly, the daily said, adding that the ministry would urge the company to launch an investigation.
   It was not possible to immediately confirm the report.

   Already Toyota has been berated by top management for going too far from its core principles by its honorary chairman, Shoichiro Toyoda. The company had been trying to sell big cars in China during the financial crisis, and spent a good part of the 2000s developing large pick-up trucks for the US market. Bloomberg reported last June that a meeting was called:

Shoichiro scolded the president [Katsuaki Watanabe] for being so anxious to boost sales and profits that he’d let Toyota emulate now bankrupt General Motors Corp. and Chrysler LLC. Toyota had become addicted to big, expensive cars and trucks and had forgotten the customers’ need to save money, Shoichiro said, according to the person’s account.

   In other words, Toyota’s culture has been suffering, and we all know what happens when sales’ volume and profit are pursued at the expense of quality or engineering. (Ask Mercedes-Benz.)
   Toyota may be an example where too many niches were created, simply to get consumers in the showrooms—and now that’s coming to bite it on the rear end. Having too many niches has one immediate drawback: consumers no longer understand the structure of the range. Is the small car the iQ, Ist, Vitz, Porte, Belta or Passo? Do I move from that to a Corolla, Auris, Blade, Corolla Rumion, Probox, Raum, RAV4 or wotsis?
   The mistakes are understandable in some ways. Toyota had to create more new models as attention spans shortened. While a car might be able to be presented as “new” for two years in the Japanese market 10 years ago, consumers expect something else within half a year. To fund this appetite, the company looked for ways to maximize profits in every market—with the US one fuelled by bigger and bigger vehicles. It had to take costs out of cars, especially with electronics (by combining as many functions on to one system as possible) and architecture—and it may be these areas where the Prius suffered.
   But no company can really afford to pursue too many niches—Mazda overextended itself in the late 1980s and early 1990s, as did Nissan in the early 1990s—when times are tough. Toyota should have forecast a downturn, as many business experts did. The question that the company needs to ask itself is: what made it so blind in the 2000s?
   Even ignoring the idea of unintended acceleration for now, Toyota ends the lunar year on a low. It will always have its diehard followers—there are many models not affected by these issues—but the company must refocus its brand for the New Year toward its traditional principles. There is every sign the company knows that, with Akio Toyoda, the founder’s grandson, now at the helm, and doing spot checks down on the production floor. (I’d rather Toyota have someone like that than a “celebrity CEO” who gives good press. The era of the celebrity boss is over for now.) It is simply a pity that the company did not get on to its mounting problems—there are claims that unintended acceleration reports began surfacing with Toyota’s Lexus ES model as early as 2004—sooner.
   Few buy a Toyota because the cars make one’s heart beat faster. They are a default choice for many people who want the simplest conveyance from A to B. Akio’s job has been reminding his own team of that, and reinstituting the ‘Toyota Way’ and kaizen, terms that many of us who went to business school during a certain era recall.

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Filed under: branding, business, cars, culture, leadership, marketing, media, New Zealand, technology, USA—Jack Yan @ 09.35

4 Responses to ‘Toyota’s troubles stem from forgetting its principles’

  1. Robin Capper says:

    Perhaps the time is right for the revival of the simplest car ever;

    Bring back the 2CV!

  2. Jack Yan says:

    You would get no complaints here!
       I was talking to another mate on Facebook and I pointed out to him that unsafe Toyotas are not unheard of. Remember in the 1970s how the NHTSA frequently rated the Toyota Corolla 30 the least safe car on American roads?

  3. jaklumen says:

    Ahhh, as much of the mass media is so buzzing about this, I was eagerly awaiting to read what you had to say.

    Indeed, this might not dissuade the diehard followers, and probably *especially* those that support the Prius hybrid specifically. But speaking of that model, I am hoping this gives Honda incentive to further improve the hybrid Civic… it’s not there yet from what I last read.

  4. Jack Yan says:

    I don’t think Honda will improve the Civic IMA. It’s nearing the end of its model cycle and with the Insight now on the market, Honda might not see any need to.
       Having all these Toyotas on the roads does make me paranoid, however.

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