Posts Tagged ‘Toyota’
Toyota is to pay a fine of $32 million to the US transportation department for not notifying them on the safety issues in the stipulated time. The auto giant has agreed to do so and this it hopes will bring an unfortunate year to an end.
In a year of major reputation crisis Toyota had it the worst in the auto sector with the recalls and the reputation blitz that followed. Toyota was the worst performer among major automakers in the U S this year, with a rise of just 0.2 percent in its single-biggest market.
While the famed management style – ‘ The Toyota Way‘ may have been great all these years, being such a global leader with a huge US market and managing it all from far far away has had its effects. Traditional management rules from Toyota city, in Japan, probably brought out these problems in the first place.
As far as business reputations go the automaker has had its worst year till date. Recalling 11 million vehicles worldwide and now being slapped a record fine has brought up the pay-out made by the company to nearly $50 million. And billions could follow if related lawsuits succeed.
After a massive global recall, the Japanese car giant ‘Toyota’ is yet again feeling the heat with the car owners demanding for full refund of their cars. Adding to the already grief ridden recall saga, Toyota invited loads of criticisms followed by legal battles ever since the revelations of their car’s tendency to accelerate out of control. The technical glitch seems too hot to handle for Toyota, and now the customers are out of control.
Thankfully, the recent recall by both Honda and Toyota has let the consumer’s to lose their confidence for Japanese vehicles. Has this change in consumer preference exposed the grey area for Toyota or other Japanese car makers? Blessing in disguise, the American car makers, ‘GM Motors’ and ‘Ford’ are finally ready to capitalize on their once undisputed Japanese competitors.
Lately the Attorneys Toyota Actions Consortium (ATAC) added rackerteering claims on Toyota for its number of lawsuits. Tim Howard,who is coordinating the ATAC even said that :
“It’s become increasingly apparent that Toyota profits were not built on quality products, but on a willful pattern of deception, fraud and racketeering.”
Undoubtedly all these development has tormented the reputation of Toyota globally. The growing list of enraged customers proves how PR was never considered at the first place followed by the absence of a strategic reputation management. Setting an examples how things can slip off your hands, if not dealt the way it has to be. Toyota has lost its reputation and number one position for being the most favorable customer loyal car maker in US. But its only matter of time before we know how grave the scar is for Toyota and other Japanese car companies.
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Close to the heels of Toyota recall, Honda Motor Co is all out to make a similar move to replace the faulty airbag deflator in their cars. The No.2 automaker of Japan is about to recall 4+ million cars.
About 12 incidents have been reported including one fatality. This is the second time Honda is recalling their cars for the same reason, previously it was in November 2008 and June 2009. The series of recalls from Honda also includes the one for faulty window switch.
The current recall applies to 2001 and 2002 year model; CL vehicles, Civic, Accord, CR-V, Pilot, Odyssey, and 2002 Acura TL. Honda is currently concentrating the recall in the United States
A Honda spokesman said “the defect was caused by insufficient stamping pressure during the production of the inflator”. On the contrary the US unit of Japan’s Takata Corporation; manufacturer of the airbag stated ‘they are not aware of any defect in airbags supplied to Honda’.
Known for their reliability and quality over the years, the recent incidence has jolted the customer’s faith in these Japanese (Honda, Toyota) vehicles. This has also effected its production and sale in many countries. Quick to grab the market share the domestic car makers; General Motors, Chrysler and Ford are looking to cash in on the woes of their unbeatable Japanese competitors.
As from the reputation management point of view, we feel if Honda is able to turn the buzz rapidly and positively, the damage will only be marginal. A positive step to regain customer confidence, Honda has already started contacting it’s customers by mail asking them to take their cars to the authorized dealers.
For Peugeot 107s and Citroen C1s, we are going to carry out an identical campaign as Toyota, says the spokesman for Peugeot Citroen, the second biggest car maker of Europe.
This statement clearly shows that Toyota’s bold move to recall millions of cars has been seen as a positive action during a reputation crisis and others are following suit. All the cars being recalled were made at a plant at Kolin, in the Czech Republic that Peugeot-Citroen has shared with Toyota – a partnership made in 2005.
A new entrant into the recall mode is Honda – Following a number of incidents in which cars reportedly set on fire after electric window switches short-circuited, Honda is to recall the 2007 and 2008 US versions of its Fits models as well as the 2002 to 2008 versions of its Jazz cars in Europe.
Is the car industry jinxed this year, one may wonder, with three big companies recalling cars all over the world?
The other question is will this affect the stock values significantly? Being the top selling cars worldwide, the brands have much to lose.
However for reputation management people, what we see in these auto recalls is a great example in company crisis management.
At least a dozen fatalities have occurred when Toyota or Lexus vehicles have surged unexpectedly with drivers finding that they are unable to stop by stomping hard on the brakes. The complaints were rising up and Toyota has quickly come up with the damage control plan, lest it effects its reputation and ultimately the business turnover.
Toyota has proven to be a quick damage rectifier when they announced the news of solving the problem with a new brake override system. The 2005 through 2010 model-year Toyota Avalons and 2007 through 2010 Camrys and Lexus ES350s are to be recalled by the automaker, who will reconfigure the floor surface beneath the pedal to create more space between the pedal and the floor. The company spokesmen announced, beginning from January, dealers will cut nearly an inch off the lower edge of the gas pedal and adjust the width and not only that replacement pedals will be available from April.
The National Highway Traffic Safety Administration has found that on most recalls, only 72% of affected owners bring their vehicles in for prescribed repairs. That means Toyota dealers can expect to see 2.7 million of the 3.8 million vehicles recalled. That’s more than Toyota’s total U.S. sales in the pre-recession year of 2007.
Those recalls will be a lengthy process and a pretty tough job to re-establish their business reputation with the dealers alone, but with some online reputation management strategies along with the technical rectification will bring in a great deal of damage limitation briskly for Toyota.
I saw a news article on the BBC about the top 100 brands in the world and thought it would be interesting to see how their rankings were reflected on the Internet in terms of Reputation Management. I got the list off Interbrand which runs a report each year. All the main brands have a http://en.wikipedia.org page but I decided not to list every Wiki page, you can easily find them yourself. The results are from the searches I did on Google.com
- Coca Cola – Number one in the report, it looks like they have about 4 websites on the first page but this massive giant still has a negative result number 7 http://www.inminds.co.uk/boycott-coca-cola.html
- IBM – One negative from the same site as Coca Cola http://www.inminds.co.uk/boycott-ibm.html Number 5, International Brotherhood of Magicians number 8, so as long as you don’t annoy one of these magical guys you should be OK
- Microsoft – They pretty much dominate the first page through all the sites they run from bing to xbox, http://en.wikipedia.org/wiki/Microsoft being the main issue
- GE – So far is doing very well like Microsoft however they also have negatives about them on the Wiki page
- Nokia – Have done a great job with their reputation online dominating pretty much the first page, again a wiki page with negative content is still available.
- Macdonalds – falls into the category of having a name with a lots of other people (Scots) and businesses helping drown out negative content. Of course there is a wiki page but on one of those rare occasions the page is about Kevin B. MacDonald so well done Macdonalds the only company so far not to have anything negative on the first page in google.com
- Google – Guess what there is not one negative piece of content about Google not even a wiki page, I wonder how they manage that
- Toyota – At the time I did this research Toyota had a couple of negative news stories, wiki page and this one http://news.cnet.com/8301-11128_3-10353116-54.html number 10
- Intel – Intel have a clear bill of health apart from Wiki page
- Disney – Have done very well, even the wiki page was number 9 in the results, a few negative news stories but not directed at them, well done!!!
I will look at the following 90 brands over the course of the week and give feedback on any that really stand out. What is amazing is how much weight Google gives to Wiki pages. Many of these wiki pages include previous law suits of the companies involved (many years out of date), I have no real understanding why they add such information, or even why they list companies in the first place. It is the easiest way for someone to get negative content up the search results by adding a page to Wiki. I thought encyclopedia’s were about how fast a Cheater can run or the Roman Wall, not how a company has had previous law suits against it.