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Beleaguered Toyota faces an uphill battle
07 February 2010 By Dick O’Brien
Japanese car maker Toyota faced one of the biggest crises of its 77-year history last week as it was forced to recall more than eight million vehicles worldwide.
The recall, which came after it was discovered that there was a potential issue with the accelerator pedal on a number of models, will have a big impact on the Irish market, Toyota is the country’s second most popular brand, outselling all other manufacturers bar Ford, and Toyota Ireland is now facing the recall of up to 26,000 vehicles. It has already begun the laborious task of contacting all affected owners and asking them to bring their car in.
Mark Teevan, the company’s after sales director, estimated that it would have the capacity to deal with 1,100 vehicles a week as it takes only 20 minutes to fix the problem. If every customer responds promptly to the recall, this means that it will take the company around six months to deal with the issue.
The problem is with one of two accelerator pedals used by Toyota. In certain circumstances, the pedal may become worn.
This wear, combined with operating and environmental conditions, can cause friction in the mechanism to increase, and may result in the accelerator pedal becoming sticky or harder to press.
Toyota is now writing to all of the customers affected, advising them how they may go about getting their car fixed.
Because of the scale of the operation, Teevan said that they would have to issue the letters in tranches, but that all would be sent ‘‘within weeks’’.
‘‘The customer doesn’t have to do anything. We can get their current address from the licensing authorities, no matter who they bought the car from, even second hand in a private sale.
The licensing office in Shannon is being very helpful. We give them the vehicle information and they give us back the customer information," he said.
Toyota is not the only company affected by the recall. The modern motor industry is quite streamlined, and some manufacturers now share production facilities and parts. In this case, some Citroen and Peugeot cars produced at the same Czech facility as the Toyota models affected have also been recalled. However, the impact on Ireland is relatively small. Only two of the affected Citroen models were sold in Ireland, while none of the Peugeots is in circulation. The recall couldn’t come at a worse time for the company in Ireland.
The economic downturn saw car sales plunge and a large number of dealers across the country were driven out of the business. But the announcement of a scrappage scheme in December’s budget, coupled with a 5 per cent year onyear increase in sales in January, means that there are some signs of light for the motor sector. The concern for Toyota is that its ability to capitalise on the recovery will be compromised by the negative publicity.
‘‘There might be an impact on the brand, but you have to remember that recalls are a fact of life in the motor industry.
They can happen, because it is such a complex product. I would say that every motor manufacturer has the process in place to deal with one, and we are no exception," said Teevan.
He also stressed that, just because the company was issuing a recall, didn’t mean that the cars affected were certain - or even likely - to develop the issue.
‘‘This is an extremely rare occurrence. It happens over a period of time and is caused by wear. People will get an indication. They will feel that their accelerator pedal is not as smooth and progressive as it used to be, that it has become sticky. There have been no incidents in Ireland as yet," he said.
‘‘In terms of the image and so forth, we feel that the key thing now is that we deal with this properly and we are seen to deal with it properly. That’s our strategy. If we do that, I think that there will be minimal damage to the brand," he said.
As publicity about the recall continues to circulate, individual Toyota dealers around the country are likely be faced with a tough sell to anxious consumers. Given the number of dealerships that have closed already, is Toyota going to provide any form of financial support or compensation to its dealers while the storm is being weathered?
‘‘It is a complex issue and it is really too early to tell yet if it will be needed. I’m not sure if there is going to be an immediate impact on dealers," said Teevan. ‘‘Obviously, in Ireland in particular, compared to other markets, there is a spike in sales between January and March.
‘‘It is a very busy time, so, even though the market is small, dealerships are very busy places. They are going to have to manage this recall at the same time as that.
‘‘We certainly have to find a way to facilitate that, and that is part of our planning process," he said.
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