In Detroit, Toyota Vows to Earn Trust
By NICK BUNKLEY
Published: January 10, 2011
DETROIT — The auto show here this week is shaping up to be a celebration of the American car industry’s resurgence. But the appearance on Monday of Akio Toyoda, the Toyota president and grandson of the Japanese carmaker’s founder, was a reminder that the biggest foreign player in the American market is refusing to be counted out.
Mr. Toyoda, making his first visit to an American auto show, stood onstage at Detroit’s Cobo Center to declare that everyone at his company is “committed to continue earning the trust and confidence of American consumers.” He went on to introduce three new versions of Toyota’s popular hybrid car, the Prius — a larger one, a smaller one and one that plugs in — in an effort to shift public attention to the company’s innovative new products rather than the flaws in its current ones.
That Mr. Toyoda even traveled to Detroit was a sign of how serious the situation remained for his family’s company after a year of muddling through the biggest crisis in its history. Toyota recalled seven million vehicles in the United States last year, and it was the only major carmaker whose sales here declined. They fell 0.4 percent, while sales for the rest of the industry rose 13.4 percent.
To a small group of reporters who interviewed him later Monday with the help of a translator, Mr. Toyoda carefully explained how Toyota’s employees would put their “heart and soul” into every vehicle, “just as mothers make rice bowls for their children.” He held up plastic-wrapped meals that he compared with American sandwiches.
Mr. Toyoda insisted repeatedly that Toyota had resolved the deficiencies that allowed last year’s recalls to occur. He talked about newly revealed plans to build a research center in Michigan that would work to make all vehicles safer, not just Toyota’s, and discussed his vision for making Toyota cars and trucks “better looking.”
But analysts say the company will not be able to put its sudden quality problems into the past quite so easily.
Rebecca Lindland, with the research firm IHS Automotive, said she had reduced her forecast for Toyota’s sales through 2025, which is as far into the future as IHS currently projects. She predicted Toyota’s market share in the United States would fall below 15 percent by 2015, from 15.2 percent in 2010.
“There are going to be consequences for a while still,” Ms. Lindland said. “Their halo has been broken, particularly for younger buyers that didn’t grow up with the Toyota mystique.”
The two biggest recalls last year were related to complaints about sudden acceleration, with Toyota cars and trucks supposedly speeding out of control, in some cases crashing and injuring or killing their occupants. Federal regulators fined the company $48.8 million for reacting too slowly on that matter and on an unrelated 2005 recall.
A recent survey by the influential publication Consumer Reports, measuring perceptions about automakers, shows that the recalls significantly dented Toyota’s previously sparkling reputation. Just 19 percent of respondents listed Toyota as having the highest quality in this year’s survey, down from 30 percent a year ago, dropping it to third place from first in that category.
Toyota narrowly held off the Ford Motor Company to rank first over all in the survey, saved only by its high scores on environmental friendliness. “For a company whose processes were scrutinized for decades by the competition and taught in colleges, this is a tough blow,” the report said.
David Champion, who heads the Consumer Reports auto testing center, said quality problems began to appear long before last year’s recalls. In 2007, the publication stopped automatically recommending new Toyota models.
“Toyota got to very dizzy heights and basically took the foot off the gas,” Mr. Champion said. “They’re still a very good manufacturer, but they’ve really got to get back to working rather than resting on their coattails.”
Toyota executives say expanding the Prius lineup shows they are working hard to offer more options and satisfy consumers, and Mr. Champion said he does see Toyota becoming more responsive under Mr. Toyoda, who took over in 2009.
After the recalls, the company installed a North American quality chief and gave American executives more authority to make decisions rather than just report information back to the headquarters in Japan.
The actions, among other steps aimed at becoming more responsive to customers, led to Toyota making a total of 18 separate recalls last year, double its previous record. The frequency of the recalls compounded the company’s image problems, but executives point to the fact that they were being initiated much faster than in the past, with the goal of improving quality and safety.
“We are a totally different company today than when this crisis took place,” James E. Lentz, Toyota’s top executive in the United States, said. “I’m not really sure it could happen today.”