Introduction
Being an internationally recognized firm with its arm reaching most of the homes in the U.S.A, Toyota, a Japanese based company has come to an age of criticism. This results from its fatal failures and mishaps which arise from designs of some of their present models. One example of these incidents is cited by Learning (2010, para.1). The author writes about an incident of a family in California that was riding on the highway when they noticed that their accelerator pedal got stuck. The car rolled a few times after careening through the road and kills all the passengers after bursting into flames.
Toyota Prius Hybrid
Aisin Seiki Cooperation has been the number one manufacturer of brake parts for Toyota over a long period of time. Of late, it has come to considerable scepticism because of some of the statistics that have been released concerning the latest “Toyota Prius” hybrid. The problems that face Toyota as a company are a fatal amongst other problems, being faced with the “stuck acceleration defect”. The company has had to recall some of their top class models in order to prevent more fatalities. Some of these statistics according to media reports in February 2010 include complaints from 77 car owners in Japan and a further 100 of them in the United States (China Top Search, 2010, para.4). This is according to the spokesman of Toyota, Iwasaki: and with this came the rise of Toyota’s Prius problems. Written down in brief are some of the consequences that Toyota has faced after this incident occurred. Other issues which will be addressed include the failures, solutions and lessons learnt by the company as concerns this crisis.
Issues That Arose
On account of the complaints that went out against Toyota, “Asahi” talked about how the stocks of Toyota have gone down. Public spectacle in this company has gone on the negative and investors started pulling out as the news had a toll on them. As it were to be expected, Toyota’s sales of all their brands, combined together had by 2009 started falling by 15%. His was a figure recorded in the United States, whereby though there was a slight growth of 6% in February 2009; the 15% drop still did have an effect on the company’s stock.
In addition to the above problem, public relations in Toyota have been highly compromised. Its brand name which has been associated with quality, and in many cases, reliability now no longer has the rich name it once did. Buyers are shifting to other car brands and this is culminating into an increment in the number of disadvantages that the company faces. When it comes to crisis management, it has never had a blow like the one it has had, with a bungling cost of $2 billion due to the recall of the gas pedal.
The companies corporate face faces annihilation if not dealt with very soon. The production of defective products from Toyota is a degree as to how unprepared the company is when it comes to Crisis Management (Wall Street Journal, 2010, para. 1-4). The disaster touches greatly on their public relations which are constantly proving to be an embarrassment to the company.
Failures
Some of the failures that are clear concerning Toyota are in how the company has failed to connect deeply with the customer. Another failure in their part is the fact that crisis management in Japan in general is still underdeveloped. Crisis is usually met with a slow response, and the problem is usually minimized. Their communication with the public is apparently very poor especially as concerns a crisis.
In addition, the Japanese company has been covering the facts, leaving the media without adequate information to do their jobs. Also, there has been an alarming rate at which complaints about under qualified products are being used (Kingston, 2010, para.7).
Solutions and Lessons Learned
There should be more focus on the customer with regard to product requirement. Improvement on corporate governance should be encouraged; this can be done by appointing outside directors who are independent. The company should also refrain from making risk management an afterthought (Wallstreet Journal, 2010, para. 8). This means that it should not down play situations that are termed as crisis. Instead, the company should look into how it can win over the people’s confidence in their products by showing formidable solutions to the crisis they themselves created.
Toyota Lexus
Though the famous and elegant Toyota Lexus has not been involved majorly in recalls, as other of the Toyota brands, the brand has had its share of the rough waters. An incident is recorded about another fatal experience where a family is heard reporting of an incident just before it meets its demise. A phone record explains clearly that the last thing that is heard is an attempt by one of the members of the family, possibly the driver, trying to explain of how the brakes had just failed, before what seems to be a crash pursues. Mr. Lastrella and his family just so happen to be one of the many families that have been fatally affected by this kind of faults in the braking system that Toyota provides (Mail Foreign Service, 2010, para. 2).
As this is one of the incidents, a report explains of how the U.S. transport secretary LaHood commanded the citizens to immediately refrain from using Toyota vehicles. This again would add to the never ending public relational challenges that Toyota is yet to solve in its companies. More than 100 complaints about the errors that owners of the Toyota Lexus are experiencing are yet to be addressed while the management of Toyota have just recalled its 4.5 million of this brand across the entire world just because of the brake issue.
Issues That Arose
The most common as would be expected is the lack of confidence in the Toyota brand that has been felt virtually across the world. Due to this lack of confidence even in the Lexus brand, it has contributed to the net 16% sales drop over the past one year. A lady being interviewed explains of how she even went to the extent of how to manually solve the sticking accelerator problem. She explains in the same article that without this idea, she would have had a serious accident in one of those incidences. In essence, customers are jumping from the once trusted Toyota to General Motors, which itself has its own managerial issues.
Failures
The failures that Lexus have caused to Toyota are the same ones that Toyota is facing. In addition, other brands of the company are also presenting the same problem. With losses being recorded in terms of sale and the decline in the stocks.Lexus has made it hard to be trusted by many of its buyers due to some of the risks they pose. The Royal Society of Prevention for Accidents in Britain has brands like Lexus and companies like Toyota in its black books. They have reproached the crisis management of the situation saying that it has performed poorly in making viable solutions for what seems to be a problem that will keep on recurring if not dealt with the seriousness it deserves.
Possible Solutions and Lessons Learnt
One of the biggest moves that the crisis management of Toyota have made is to recall its millions of products back in order to have check- ups done for all those vehicles that will be part of the recall. After realizing that they also had faults in the steering wheels adjustment in some conditions, coupled with the brake situation, the company issued free servicing for a few models of the Lexus and according to Lexus update article. In addition, they also lifted the recall processes after verifying that the Lexus were safe for travel worldwide. Open lines for any further consultations have been kept just in case anything else goes wrong. In essence, the Lexus brand has accepted its mistake in making faulty vehicles and has gone to the extent of giving a viable solution to their problems. By doing so, Lexus has been able to improve the confidence their users have in the brand and everything seems to be “business as usual for the brand.
Recommendations
For Toyota in general, it has been realised that most of the problem that the firm faces relates to the decision it makes in order to solve problems in times of crisis. The aspect of downplaying and trying to minimize the problem has not been working for most of its customers, especially when it comes to Prius hybrid. It is the high time that vehicle manufacturers with the rank of Toyota understand the implication of some of their actions towards the customers. Owning up to its mistakes is one of the best ways to begin the process of solving such a crisis as the one facing Toyota.
Reference List
China Top Search. 2010. Toyota Prius Hybrid car brake problems, the spread of the crisis.(On-line).
Learning, Hills. 2010.Toyota Brake Recall – Japanese Reactions to the Current Crisis. Hills Learning. (On-line).
Mail Foreign Service.2010. ‘There’s no brakes… hold on and pray’: Last words of man before he and his family died in Toyota Lexus crash. Mail (Online).
Wall Street Journal.2010. A Crisis Made in Japan. Web.