for Toyota, long the gold standard for quality, reliability and efficiency in car manufacturing.
Yesterday, Akido Toyoda, company president and chief executive, apologised for causing customers "worry" after a global recall ballooned into broader concerns over its vehicles' quality, its own integrity and the future of its business.
Toyota has lost more than a fifth of its market value since January 21, when it announced a recall in the US of cars due to defective accelerator pedals that might stick.
The recall widened to Europe and beyond.
Standard & Poor's yesterday said it had put its AA debt rating under review with negative implications, citing the risk the group faced from "quality-related issues".
Toyota's speed to market, lean manufacturing, and groundbreaking technology have helped it attain near-legendary status in the industry.
But many of the features that made it the largest and until last year the most profitable carmaker in history started to look more like liabilities this week.
Toyota's use of common parts across many models was one of the reasons behind the size of the latest recall, which affects 4.5m vehicles, mostly in the US and Europe.
This was separate from its earlier recall of 5.75m cars whose floor mats risked jamming in the accelerator, though some models are subject to both recalls.
Then the Prius, synonymous with Toyota's technological edge and "green" brand ethos, came under US regulators' scrutiny after more than 100 customer complaints about the regenerative braking system that recharges the battery.
Toyota's assurances that the problems were "rare" seemed out of touch with growing concern over its products in the US and doubts about whether it had been entirely open about the various issues.
The US Congress pressed for more information in preparation for hearings starting next week.
Toyota said the recall and related sales and production freeze - it closed five US assembly lines temporarily last week - would cost it about $2bn, but that figure does not take into account the impact from lost future sales.
Last month, Toyota saw is US sales drop 16 per cent, while its top two rivals General Motors and Ford both reported big gains.
Its rapid fall from favour contrasts sharply with its slow rise to the top as one of the industry's most valuable and trusted brands.
Launched before the second world war out of a family loom-making business, Toyota built the car business to challenge US and European incumbents by focusing on lean production techniques.
When it entered the US market in 1957 its first car, the Toyopet, was such a clunker that it got no further than Las Vegas on a Los Angeles to New York endurance run.
But Toyota learned.
"No detail was unimportant, and they paid very close attention to customers," says Dave Cole, chairman of the Ann Arbor-based Centre for Automotive Research.
Toyota was criticised during the Japan-bashing climate of the 1980s but adapted by building more plants in the US, where it has invested $17bn to date.
The company's models, such as the Camry and Corolla sedans and RAV sport utility vehicle, were far from eye-catching but by the end of the decade beat Detroit-built models on quality and reliability.
In 1989, it launched the Lexus, which was to become the US's biggest luxury brand.
Most carmakers have copied elements of The Toyota Way in order to cut costs in their operations.
Industries outside carmaking have embraced its practices. Its Japanese names have entered the management lexicon: kaizen (continuous improvement) and genchi genbutsu (going to the source of a problem to study it oneself).
But Toyota's expansion on six continents was not matched by a change in the company's culture, still surprisingly provincial in outlook and centred in Japan.
By 2006, Toyota had the largest recalls of any carmaker in the US.
At the time, then president Katsuaki Watanabe described mounting quality problems as a "warning signal" and "an emergency".
Toyota's expansion formally went into reverse in 2009, just after it overtook GM as the largest carmaker, when it reported a record loss and shelved plans to open its 11th US plant.
Mr Toyoda yesterday promised a return to the genchi genbutsu and "customer first" principles.
People who know the company say it faces a tough slog.
"This is a big challenge, but if anyone can get past it, they can," says John McEleney, chairman of the National Automobile Dealers Association, who owns Toyota and General Motors dealerships in Iowa.
Related Headlines
Toyota president sorry for recalls
Toyota’s recall - the details
US opens Toyota Prius brake probe
Viral element spins events out of control
Warning to Toyota: speed can kill
Surprise uplift in UK car registrations
Toyota raises forecast despite recall crisis
Fresh spat over ‘cash for clunkers’ scheme
Porsche board under fire over derivatives
Pressure mounts over Toyota recalls
Car registrations increase 30%
Friday, February 05, 2010
DTN News: Toyota's Long Climb Comes To An Abrupt Halt ~ Automobile News
DTN News: Toyota's Long Climb Comes To An Abrupt Halt ~ Automobile News
*Source: DTN News / FT.com By John Reed in London and Bernard Simon in Toronto
(NSI News Source Info) LONDON, UK - February 6, 2010: It has been a brutal week
for Toyota, long the gold standard for quality, reliability and efficiency in car manufacturing.
Yesterday, Akido Toyoda, company president and chief executive, apologised for causing customers "worry" after a global recall ballooned into broader concerns over its vehicles' quality, its own integrity and the future of its business.
Toyota has lost more than a fifth of its market value since January 21, when it announced a recall in the US of cars due to defective accelerator pedals that might stick.
The recall widened to Europe and beyond.
Standard & Poor's yesterday said it had put its AA debt rating under review with negative implications, citing the risk the group faced from "quality-related issues".
Toyota's speed to market, lean manufacturing, and groundbreaking technology have helped it attain near-legendary status in the industry.
But many of the features that made it the largest and until last year the most profitable carmaker in history started to look more like liabilities this week.
Toyota's use of common parts across many models was one of the reasons behind the size of the latest recall, which affects 4.5m vehicles, mostly in the US and Europe.
This was separate from its earlier recall of 5.75m cars whose floor mats risked jamming in the accelerator, though some models are subject to both recalls.
Then the Prius, synonymous with Toyota's technological edge and "green" brand ethos, came under US regulators' scrutiny after more than 100 customer complaints about the regenerative braking system that recharges the battery.
Toyota's assurances that the problems were "rare" seemed out of touch with growing concern over its products in the US and doubts about whether it had been entirely open about the various issues.
The US Congress pressed for more information in preparation for hearings starting next week.
Toyota said the recall and related sales and production freeze - it closed five US assembly lines temporarily last week - would cost it about $2bn, but that figure does not take into account the impact from lost future sales.
Last month, Toyota saw is US sales drop 16 per cent, while its top two rivals General Motors and Ford both reported big gains.
Its rapid fall from favour contrasts sharply with its slow rise to the top as one of the industry's most valuable and trusted brands.
Launched before the second world war out of a family loom-making business, Toyota built the car business to challenge US and European incumbents by focusing on lean production techniques.
When it entered the US market in 1957 its first car, the Toyopet, was such a clunker that it got no further than Las Vegas on a Los Angeles to New York endurance run.
But Toyota learned.
"No detail was unimportant, and they paid very close attention to customers," says Dave Cole, chairman of the Ann Arbor-based Centre for Automotive Research.
Toyota was criticised during the Japan-bashing climate of the 1980s but adapted by building more plants in the US, where it has invested $17bn to date.
The company's models, such as the Camry and Corolla sedans and RAV sport utility vehicle, were far from eye-catching but by the end of the decade beat Detroit-built models on quality and reliability.
In 1989, it launched the Lexus, which was to become the US's biggest luxury brand.
Most carmakers have copied elements of The Toyota Way in order to cut costs in their operations.
Industries outside carmaking have embraced its practices. Its Japanese names have entered the management lexicon: kaizen (continuous improvement) and genchi genbutsu (going to the source of a problem to study it oneself).
But Toyota's expansion on six continents was not matched by a change in the company's culture, still surprisingly provincial in outlook and centred in Japan.
By 2006, Toyota had the largest recalls of any carmaker in the US.
At the time, then president Katsuaki Watanabe described mounting quality problems as a "warning signal" and "an emergency".
Toyota's expansion formally went into reverse in 2009, just after it overtook GM as the largest carmaker, when it reported a record loss and shelved plans to open its 11th US plant.
Mr Toyoda yesterday promised a return to the genchi genbutsu and "customer first" principles.
People who know the company say it faces a tough slog.
"This is a big challenge, but if anyone can get past it, they can," says John McEleney, chairman of the National Automobile Dealers Association, who owns Toyota and General Motors dealerships in Iowa.
Related Headlines
Toyota president sorry for recalls
Toyota’s recall - the details
US opens Toyota Prius brake probe
Viral element spins events out of control
Warning to Toyota: speed can kill
Surprise uplift in UK car registrations
Toyota raises forecast despite recall crisis
Fresh spat over ‘cash for clunkers’ scheme
Porsche board under fire over derivatives
Pressure mounts over Toyota recalls
Car registrations increase 30%
for Toyota, long the gold standard for quality, reliability and efficiency in car manufacturing.
Yesterday, Akido Toyoda, company president and chief executive, apologised for causing customers "worry" after a global recall ballooned into broader concerns over its vehicles' quality, its own integrity and the future of its business.
Toyota has lost more than a fifth of its market value since January 21, when it announced a recall in the US of cars due to defective accelerator pedals that might stick.
The recall widened to Europe and beyond.
Standard & Poor's yesterday said it had put its AA debt rating under review with negative implications, citing the risk the group faced from "quality-related issues".
Toyota's speed to market, lean manufacturing, and groundbreaking technology have helped it attain near-legendary status in the industry.
But many of the features that made it the largest and until last year the most profitable carmaker in history started to look more like liabilities this week.
Toyota's use of common parts across many models was one of the reasons behind the size of the latest recall, which affects 4.5m vehicles, mostly in the US and Europe.
This was separate from its earlier recall of 5.75m cars whose floor mats risked jamming in the accelerator, though some models are subject to both recalls.
Then the Prius, synonymous with Toyota's technological edge and "green" brand ethos, came under US regulators' scrutiny after more than 100 customer complaints about the regenerative braking system that recharges the battery.
Toyota's assurances that the problems were "rare" seemed out of touch with growing concern over its products in the US and doubts about whether it had been entirely open about the various issues.
The US Congress pressed for more information in preparation for hearings starting next week.
Toyota said the recall and related sales and production freeze - it closed five US assembly lines temporarily last week - would cost it about $2bn, but that figure does not take into account the impact from lost future sales.
Last month, Toyota saw is US sales drop 16 per cent, while its top two rivals General Motors and Ford both reported big gains.
Its rapid fall from favour contrasts sharply with its slow rise to the top as one of the industry's most valuable and trusted brands.
Launched before the second world war out of a family loom-making business, Toyota built the car business to challenge US and European incumbents by focusing on lean production techniques.
When it entered the US market in 1957 its first car, the Toyopet, was such a clunker that it got no further than Las Vegas on a Los Angeles to New York endurance run.
But Toyota learned.
"No detail was unimportant, and they paid very close attention to customers," says Dave Cole, chairman of the Ann Arbor-based Centre for Automotive Research.
Toyota was criticised during the Japan-bashing climate of the 1980s but adapted by building more plants in the US, where it has invested $17bn to date.
The company's models, such as the Camry and Corolla sedans and RAV sport utility vehicle, were far from eye-catching but by the end of the decade beat Detroit-built models on quality and reliability.
In 1989, it launched the Lexus, which was to become the US's biggest luxury brand.
Most carmakers have copied elements of The Toyota Way in order to cut costs in their operations.
Industries outside carmaking have embraced its practices. Its Japanese names have entered the management lexicon: kaizen (continuous improvement) and genchi genbutsu (going to the source of a problem to study it oneself).
But Toyota's expansion on six continents was not matched by a change in the company's culture, still surprisingly provincial in outlook and centred in Japan.
By 2006, Toyota had the largest recalls of any carmaker in the US.
At the time, then president Katsuaki Watanabe described mounting quality problems as a "warning signal" and "an emergency".
Toyota's expansion formally went into reverse in 2009, just after it overtook GM as the largest carmaker, when it reported a record loss and shelved plans to open its 11th US plant.
Mr Toyoda yesterday promised a return to the genchi genbutsu and "customer first" principles.
People who know the company say it faces a tough slog.
"This is a big challenge, but if anyone can get past it, they can," says John McEleney, chairman of the National Automobile Dealers Association, who owns Toyota and General Motors dealerships in Iowa.
Related Headlines
Toyota president sorry for recalls
Toyota’s recall - the details
US opens Toyota Prius brake probe
Viral element spins events out of control
Warning to Toyota: speed can kill
Surprise uplift in UK car registrations
Toyota raises forecast despite recall crisis
Fresh spat over ‘cash for clunkers’ scheme
Porsche board under fire over derivatives
Pressure mounts over Toyota recalls
Car registrations increase 30%
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