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Posted on 02.09.2010

Toyota’s Tough Times Create Credibility Crisis

toyota's-tough-times-create-credibility-crisisTimes are tough at Toyota.  What with the piling on of slippery floor mats, sticky accelerator pedals and faulty brakes, it’s no wonder they are experiencing serious damage to their brand.   And they’re taking a lot of criticism for the way they are handling the crisis.

The crisis managers at Toyota have got their work cut out for them.  It’s not going to be as simple as offering an apology for the anxiety and inconvenience created by the recent recalls.  New evidence reported in the New York Times indicates Toyota has a long and disturbing history of trying to cover up defects in quality and safety. Now, it’s not just the latest double dip of recalls that Toyota has to overcome.  The problem appears far more systemic:  If it is true that Toyota has repeatedly been aware of safety issues and consciously waited up to eight years (while they were developing new replacement models) to recall the cars that were potentially putting Toyota fans and their children in the line of danger,  they have violated consumer trust.  Perhaps permanently. For decades, Toyota has enjoyed the kind of customer loyalty that was the envy of every American corporation.  There are blogs, member organizations, Facebook pages and all kinds of online chatter from people who call themselves lifelong fans of the car manufacturer, many who have said they would never own anything other than a Toyota.  And why do they love this brand so much?  Quality and reliability. Ouch. There is only one way Toyota is going to regain its credibility with its customers and the market: prompt response and complete transparency.  They’ve got to aggressively get the parts to the dealers and get these cars off the road as quickly as possible and with minimal inconvenience to the customer.  They’ve got to offer special service checks and insurances for a long period of time, 24/7 hotline phone numbers and online access for people to talk to service experts, daily progress reports to the media, bloggers and the international public and aggressive incentives for new buyers.  Most importantly, they should throw out the people who made the decisions not to issue recalls sooner when it came to choosing between their admiring public and corporate greed. These are not “PR strategies.”  Or are they?  The only thing that is going to save Toyota is for its leaders to start thinking of their business from the customer’s perspective.  When they start to relate better to all of their publics (customers as well as shareholders), they can work through this credibility crisis and re-emerge, albeit it in five to ten years, as a dominant and trusted corporation. We are, after all, a forgiving and forgetting public.

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