Toyota: in a 'spiral of decline'?

published 5 February 2010

Japan's Toyota, the world's biggest car manufacturer, has apologised for having to recall a total of almost 4.5 million vehicles in North America and Europe. The cars' accelerator pedals jam so they speed up uncontrollably.

Last week the company called a temporary halt to production and sales of many popular models that jointly accounted for almost 60% of the group's US sales last year. As a result, the group's American sales slid by 16% in January as rivals' rose.

What the commentators said

Toyota has handled this episode with "breathtaking incompetence", said David Wighton in The Times. It took days for the group to send an executive to respond to press questions, and company president Akio Toyoda only apologised at Davos when pressed by reporters.

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Clearly, Toyota's PR operation "is not functioning" properly, said Koji Endo of Advanced Research JapanYet until recently, "they had a culture of responding swiftly to problems".

This episode has taken a "blowtorch" to the group's overall reputation, said Bloggingstocks.com. When it came to reliability, Toyota was once "king". The problem is fast growth over the past few years, said The Economist.

The "dash" to become the world's top car-maker has taken its toll: last year there was a large recall and 2006 saw another bout. Moreover, its rivals are getting their act together and designing increasingly "desirable" cars. Even Toyota's lead in electric vehicles is now in doubt. Toyota appears to be stuck in "a spiral of decline".

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