Toyota's reputation takes a major dent

The complacency that brought General Motors, Ford and Chrysler to their knees seems to have infected Toyota, too.

The Japanese carmaker's products have been a quality byword for American drivers, so much so that its management and manufacturing techniques have long been studied and copied by rivals in the United States and abroad.

Evidence has been building for years, however, that Toyota may have sacrificed its reputation for excellence to the quest for market share and that, in its smugness, it may have ignored its customers and its own management principles.

"Toyota seems to have taken a page out of the playbook from the bad old days of the Detroit Three - when vehicles were designed and built to the lowest common denominator - and when 'good enough' was good enough," says Peter De Lorenzo, industry blogger and author of The United States of Toyota, a book charting Toyota's growth in the US.

The latest blow to its reputation came when company officials announced they would recall 437,000 hybrid vehicles worldwide for braking problems. The newest version of its flagship Prius hybrid was among the cars recalled.

The announcement boosted the number of Toyota vehicles recalled since October to more than 8.4 million, one of the largest series of car recalls in history.

Car reviewers have been lowering their marks on Toyota for some time, pointing out little construction flaws such as misaligned dashboards and crooked glove compartments that may have been clues to the larger safety-related issues that have emerged.

"Visible problems make you wonder about things you can't see," says Jeff Bartlett, deputy online editor for vehicles US Consumer Reports.

Less than a decade ago consumers viewed the quality of new Toyotas to be among the best in the industry, according to findings by Art Spinella, president of CNW Research.

But by 2006, consumers began to report their perception that the quality was slipping.

Now Toyota ranks 16th in perceived quality, says CNW's surveys, behind brands like Mazda, Volkswagen and Volvo.

Not what you'd expect from the company that overtook GM last year as the global sales leader.

Fear of losing that momentum may have pushed Toyota to simultaneously expand production at a furious rate while whittling costs in a bid to retain its pricing advantage. But quality may have been the victim.

Toyota's method of incremental sales increases year-over-year followed by a correspondingly gradual increase in capacity - while accounting for its usual high quality standards - gave way to a frenzy of plant building and a complete abdication of what it once stood for when it came to quality, De Lorenzo said.

Toyota's lack of focus on the core task of building the best cars it possibly can stands in contrast to the responses of Ford and Honda to adverse situations.

When Ford began running low on cash several years ago, the company dumped its glamorous Formula One racing team, sold off non-critical distractions like Jaguar and Land Rover and left industries like the British tyre store Kwik-Fit.

When the global economic slowdown struck 18 months ago, Honda also dropped its costly F1 team as well as less costly motorcycle racing programmes that the company has long considered core to its self-image.

They dropped the slow-selling S2000 and stopped development of a mid-engine super sportscar successor to the NSX.

Toyota didn't drop its F1 programme - rumoured to have the biggest budget of any of the teams - until a year later. And it completed development of its own mid-engine sports car, the Lexus LFA, reluctant to cancel it after a decade's work and a cost said to be as much as US$1 billion.

Such decisions do not reflect the quick reflexes and stern judgment needed to stay atop today's car industry, analysts said.

"It will take years and billions upon billions of dollars for Toyota to recover from this," De Lorenzo predicted.

- AP