To say that Toyota is an embattled company is an understatement.
The Japanese automaker has been hit by a flood of bad news: Plummeting sales. A spate of recalls. And quality control issues that led Consumer Reports this week to rank Ford Focus as more reliable than a Toyota Corolla.
And if all that weren't enough, federal officials are investigating a fatal accident involving allegations of a sticking accelerator pedal. Toyota recently announced that it would replace floor mats in 3.8 million Toyota and Lexus vehicles.
Toyota brand sales are down 27.8 percent year to date through September, while market share is at 14.7 percent compared with 14.8 percent last year.
"I think that if these nuggets of bad publicity continue, at some point they will affect the company and the brand in the U.S.," said independent auto analyst Tom Libby, in Detroit. "It will slowly build and create a perception over time. We're not there yet, and there's been no major effect on sales yet; but if it continues, at some point there will be a shift in sales."
Consumer Reports, the automotive testing giant, has noticed a change in quality in some of Toyota's products.
"I think it was two years ago in our annual questionnaire we found three Toyota vehicles had fallen below average for the first time in a very long, long time," said David Champion of Consumer Reports. They were the redesigned Toyota Tundra four-wheel drive, the Toyota Camry V-6 and the Lexus GS four-wheel drive. Currently, there aren't any Toyota products below average.
Meanwhile, Toyota is cooperating with the National Highway Traffic Safety Administration to discover the cause of an incident in which four people in a 2009 Lexus ES 350 were killed in suburban San Diego. Initial reports traced the accident to the car's accelerator pedal being caught in the floor mat.
Toyota officials are not yet convinced the floor mat was the culprit.
"Our engineers are still working with NHTSA to figure out what to do about this. It probably will not involve the floor mats themselves. We don't have any control if people hook up the mats back incorrectly after vacuuming the car out, for instance. Nor do we have any control over aftermarket mats that are used, or if a slipping winter mat, for instance, is tossed over our original mat," Toyota spokesman Wade Hoyt said,
Toyota Corp. President Akio Toyoda was disturbed by the accident and issued a public apology. "Customers bought our cars because they thought they were the safest but now we have given them cause for grave concern. I can't begin to express my remorse," Mr. Toyoda said in a statement.
If an accelerator pedal gets stuck, Mr. Hoyt said: "Our recommendation is to knock the transmission into neutral and shut off the engine. Or stand on the brake pedal with both feet. ... Every car will eventually stop even if the throttle is wide open because brakes are more powerful than the engine."
The National Highway Traffic Safety Administration also has said it would conduct a preliminary investigation into frame corrosion on 2000 and 2001 Toyota Tundra pickups.
Industry analysts believe Toyota's recent problems can be traced to the company's race to greater sales volume.
"I think overall, as they have widened their model lineups that they have made available to the public, trying to keep very tight control over all their products has been a little tough for them to achieve. Toyota and Honda still make the most reliable vehicles on the road, but they have slipped a little bit," Mr. Champion said.
"They will have to make quality a higher priority than sales volume," Mr. Libby said. "They were very reknowned for quality. They need to return to the basics."
"Right now, the whole industry is down, and being a full-line manufacturer, we're affected like anyone else. It's not necessarily a reflection on our products or our processes," Mr. Hoyt said. "But sometimes when it rains, it pours."
Even though Toyota is struggling now, it would be foolhardy to count the company out for very long.
In addition to having loyal customers, the company is in a position to make dramatic shifts in its production and plant capacity and do so quickly to meet changes in market demand, a flexibility that many car makers are still trying to attain. A case in point is a recent decision to consolidate its truck production at one plant in Texas, thus freeing up space in an Indiana plant to build Highlanders.
Toyota also has a policy of replacing its entire product portfolio in five years time, thus guaranteeing a fresh selection of models for consumers to consider and making it harder for other manufacturers to keep up, analysts say.
Even though year-to-date sales are down 26.8 percent for Lexus, sales for September were up 11.8 percent, thanks to popular new entrants, the RX series of crossovers, the HS 250h hybrid luxury car and the IS convertible.
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