2010 may be a memorable year for auto industry. What we are witnessing now is a live unfolding of a story, that is going to be part of numerous future case studies and management lessons. Recall of 8.5 million vehicles in US for potential sticky gas pedal issue has shaken and damaged the perception of Toyota among its customers and buyers. The fall of Toyota’s ‘Champion of quality’ image is nothing short of a intrigue filled fiction, I won’t be surprised if there are no movies inspiring from this.
While its quite difficult at this point of time to analyze deep into what went wrong, it is not so complex to see the repercussions and reactions that caused in the industry. Everyone is watching how customers are reacting. Every one wants to know how competitors are reacting. We have a marketing situation lab unfolding in front of us to learn from it. Future Kotlers and Druckers are already deep into the statistics of various studies at this time.
This is not something to be looked only in the context of Auto Industry and what transformations are going to be in store for it. The core dynamics of this change is going to be applicable to any industry of similar nature.
To me its plain ethics of marketing. Suspected relations between regulatory bodies and manufacturers are not so uncommon in US though less common than India. An issue as serious as this was successfully kept under cover and ignored for years, how is it possible without active assistance of regulatory bodies? Startling details of this complex unholy relationship is still coming out from the closet.
That is just one part of the question. Another more serious part is the so called reputation of responsible and responsive organization that forever seem to care about the customer above everything. Is that just another advertising line?
May be there is something else we fail to see here. Why do people buy Toyota? Do they make best cars available in the market or is it because they make the most value for money products. The answer may be no for both of this questions. People buy Toyota because they hear everywhere about Toyota as the leader and as the producer of best quality cars made in this country. If this is true, then its never going to be easy for a Japanese company to overcome this image. The damage is already done.
Sticking gas pedals are not just a Toyota issue, it seems this happens in many cars if you floor the accelerator. Recalls due to safety issue is also nothing new. 2008 saw Ford recalling more than 2 million cars. There are around 30 cases of death with suspected issue from Toyota cars from 2001 in US courts. The real issue here is the a perceived reluctance from Toyota to admit an address this issue in a timely manner. More irritating is how Toyota deals with issues like this in a closed door manner that seems to convey a authoritarian regime trying to save its face. That is not the kind of communication style an American expects to hear. Japanese may be better makers or cars but they still have a long way to go when it comes to marketing. As the saying you goes “the higher you climb the harder you fall”, this is a time to stop and look how you achieved what you have and make corrections to your path as you go rather than waiting to for the last moment.
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