14 February 2011

In case you missed it, there was a short news story in some of the national papers last week. It read: ‘A US investigation into unintended acceleration in Toyota vehicles has found no flaws in the cars’ electronic throttle systems’.

The story went on to say: ‘The 10-month probe concluded that the problem, which led to the recall of over eight million Toyota vehicles, was caused entirely by sticky accelerator pedals and a design flaw that caused accelerators to become trapped by floor mats’.

I’m not going to try to defend my fellow journalists who gave the story rather less space than the original scare. It would be pointless. Anyway, I do acknowledge that headlines about ‘killer cars’ are more likely to sell newspapers than headlines about floor mats. Like them, I am in the business of selling news.

Toyota retailers I talk to say the recall has done no lasting damage; though it might have hit Toyota’s long standing reputation for outstanding quality. As is often the case in business, the outcome is determined not by the original complaint but how you handle the complaint.

In years to come I suspect business studies courses may use the Toyota case as an example of how recalls, while never welcome, should be handled. The great unknown is what effect it had on potential new customers; perhaps last week’s story will go some way to rectifying that.

The recall cost Toyota money, both in the short and medium term, but it’s important to get the whole thing in perspective. Also last week, the Financial Times reported Toyota bosses are far more worried about the strength of the yen against the dollar than they are about the cost of the recalls. According to the FT, every one yen of appreciation wipes Y30bn off the company’s net earnings.

It’s a salutary reminder that, just as many auto retailers are actually in the property business, most global manufacturers are more about currency exchange than they are about carmaking. But that’s not likely to make newspaper headlines either.

However you make your money, have a good week, both in and out of the showroom. If you have a story for us, or want to get something off your chest, email rupert@auto-retail.com

Rupert Saunders
 

Tags: class action lawsuit, Recall, Toyota, unintended acceleration