Toyota recalls 8 million vehicles worldwide

In this unfortunate situation the fact that the company was forced into recall does not help. According to CNN “U.S. Transportation Secretary Ray LaHood said Tuesday it took pressure from the government to get Toyota to take action over its sticking gas pedals.”  Mr. Lahood also told CNN that it took a lot of effort to get this point including reminding Toyota of its legal obligations. In response to this pressure Toyota not only recalled 2.3 million vehicles, it also halted the production altogether for the 8 models in question to remove any doubts in the public eyes of its commitment to address the issue. To date the combined recall of Toyota vehicles around the world amounts to 8 million units.

 

Based on Toyota’s website the following models are impacted: “certain 2009-2010 RAV4, certain 2009-2010 Corolla,  2009-2010 Matrix, 2005-2010 Avalon, Certain 2007-2010 Camry, Certain 2010 Highlander, 2007-2010 Tundra,  2008-2010 Sequoia.” Looking at the model years of these cars it is pretty clear that the current problems are fairly recent and they coincide with Toyota’s accelerated rise to the second spot and with the major market share decline of the US automakers. 

 

Whatever the underlying technical problem is, it raises the issue of supply risk management, supplier evaluation and the importance of the systemic approach. The challenge is that in this particular case the problem could have been caused by a very negligent and small supplier that from Toyota’s point of view could not have any significant impact on the quality of the end product. Yet, this debacle proves that even a small supplier can have a huge impact on a famous brand causing enormous damage to the reputation and the bottom line.

 

We can trust Toyota with sorting these supply problems out and fixing them. Indeed, they are the ones setting many of today’s quality standards of today. But the timing could not be worse. In another interesting twist Honda said it would recall 646,000 of its Fit/Jazz and City models, including 140,000 in the United States, because of a faulty window switch, after a child died when fire broke out in a car last year. Comparing to Toyota’s this is a much smaller recall and with all the noise it should not create too many problems for Honda. But given the current climate with Hyundai, GM and Ford coming strong it can cost Japanese manufacturers dearly.