Electric roadster a sideshow for struggling Toyota

The usually grim-faced Toyota president Akio Toyoda was all smiles, trumpeting a newfound friendship with US luxury electric carmaker Tesla.

Toyoda received as a gift from Tesla Motors CEO Elon Musk a red roadster, that would sell for US$232,000 ($303,000) - US$49,000 more than usual because of a special paint job.

Toyoda's appearance struck a contrast to others in the past year that were dominated by apologies about Toyota's massive global recalls of some of its most popular cars.

Shaking hands with Musk, Toyoda told reporters the Japanese carmaker had much to learn from Tesla.

"The speedy decision-making - that part of its makeup is what we really want to absorb," he said.

"Toyota began as a venture. I think this will give us an opportunity to bring back that spirit."

Over the past year, Toyota - the world's biggest carmaker - has recalled more than 11 million vehicles globally for faulty gas pedals, floor mats that can trap accelerators, defective braking and stalling engines.

It was also widely criticised as being too slow to respond to customer complaints, sometimes appearing reluctant to admit its mistakes.

Its once-sterling image has been tarnished, especially in the US, where the bulk of the recalls came, and where it faces hundreds of lawsuits, some involving accidents suspected of being linked to quality lapses.

Its US sales lag despite generous incentives.

Toyoda, grandson of Toyota's founder, has endured harsh public criticism, including appearing before a congressional committee.

While returning to profit in recent quarters, Toyota's performance is a shadow of its heyday.

Three years ago, sales were at a record US$317 billion. Now, it's expecting US$232 billion in sales for this fiscal year ending March 2011. It had been on track to sell 10 million vehicles a year but is now expecting to sell about 7 million.

Some analysts say Toyota is taking the wrong approach in banking on an image perk with a niche player like Tesla, and suggest it should address the basic problem of quality control.

"The big problem is that Toyota has not stated an exit strategy on the recall fiasco," said Tatsumi Tanaka, a crisis management expert who heads Tokyo-based Risk Hedge. "This way, it will continue to have recall after recall, and the worries will never end."

Toyota should clearly outline how it is handling the recall crisis, how long the measures would take, and how exactly it hopes to fix the root cause of recurring quality problems.

Recalls should be a welcome sign a carmaker is getting to the bottom of a problem, not as a sign of continuing problems, Tanaka said.

Tsuyoshi Mochimaru, analyst with Mitsubishi UFJ Securities, said electric vehicles comprise such a small portion of the market that the Tesla partnership can't be viewed as any plus.

"There is always that potential it will grow, but so far nobody knows what it means," he said.

- AP

- NZ Herald

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