Toyota faces new crisis

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On January 21st, 2.3 million Toyotas of eight models has been recalled for fixing the flaw in gas pedal which was detected in a report about more Toyota sudden-acceleration problems.

 

"There is a possibility that certain accelerator pedal mechanisms may, in rare instances, mechanically stick in a partially depressed position or return slowly to the idle position", said Irv Miller, the group vice president for Toyota Motor Sales.

 

The cut in production cost and the pressure to boost productivity were named as two big reasons for the problems. In order to enhance competitiveness, a pedal accelerator might be shared across different vehicle models, and this is where the problem begins.

 

Suffering from sales suspense of eight models, dealerships are having an extremely hard time: lost revenue, panicked customers, and discouraged sales staff.

 

Numbers of anxious customers have been knocking sellers' doors for claiming. "A lot of the work this week has been educating customers," says Bloch, owner of one lot in Dorchester. "Empathetic conversations. A lot of hand-holding, explaining. There hasn't been a dull moment."

 

Owing to the recalls, not only do the new car sales slip significantly, other best-sellers such as Camry, Corolla, or RAV4 are badly affected as well. For some dealerships, the consequence is bad enough to throw off their sales.

 

Meanwhile, repair divisions also face a surge in work when both cars of customers and new ones on lots require adjustment.

 

This is not the first crisis of the Japanese automaker. Last year, 4.9 million Toyotas have been affected by their safety recalls - the biggest number of vehicles in any announcement ever involved in a single year.

 

Predictably, a market's opening has been created for other competitors. Toyota probably has to struggle to protect its image.

 

On the other hand, "the recall is a smart, preemptive move", says Consumer Reports' Mr. Fisher. "The fact that they're doing the recall shows they're trying to nip the problem in the bud."

 

Toyota has shown its serious concern about the fault and proved it, as Mr. Bloch suggests, as "the true leaders in vehicle safety and reliability."

 

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Husna Haq has 1 articles online

I am a fan of news on business. Currently, I am a business correspondent.

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Toyota faces new crisis

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This article was published on 2010/01/30