In the global era, multinational corporations have a great effect on the global economy. Toyota, the Japanese automobile company that had been leading the global automobile market, is losing its fame and rating because of defective products and suspicious concealment of flaws. We look into the whole story of the Toyota recall and find some lessons from it.
Toyota, the world’s largest car company which has grown rapidly over the last 10 years, recalled about 10 million or more cars. In February 2010, the number of recalled cars, in only the United States, was 7.6 million or more, and the number exceeds the number of car sales of the previous year. The main reason for the recall is that when drivers use the accelerator pedal, it sticks. The flaw can be fatal for customers. At this point, 40 people have died of auto accidents caused by the flaw in the United States alone. Bereaved families that lost their relatives have brought 60 compensation lawsuits against Toyota, and law firms in 16 states are preparing lawsuits.
A hearing in Congress on the Toyota recall was held in Washington, D. C., on February 24. The important issue of the hearing was whether Toyota had tried to conceal the accelerator pedal defect or not. Akio, the president of Toyota, attended the hearing and clouded the issue by answering “I don’t know” and “I can’t remember that” to questions about the defects. Therefore, he was criticized by people who attended the hearing.
ABC broadcasting station already had raised a question about the safety of Toyota cars in a program “Runaway Toyota” in November 2009, before Toyota made a public statement about the large scale recall. After that, Toyota expressed displeasure about the ABC report by discontinuing their commercials on ABC. As the United States press started raising the safety problem of Toyota cars, the political community started to have a special interest in this problem. Some suggested that there is some political or hidden financial agenda behind this interest in the Toyota recall because it is a delicate time when GM is carrying out a large-scale restructuring to restore its footing in the automobile market. Therefore, some doubt the real intention of the political community in the United States.
Because of the Toyota crisis, the automobile market has been changing. Korean automobile companies have grown steadily since 2009, and they are expanding their share of the American automobile market. American automobile companies, which were in financial crisis, are trying to use this situation as an opportunity. Sales of Toyota have decreased by 16% since the automobile defect problem, and their estimated market share will decrease from 17.6% to 16.5% this year.
Akio, the president of Toyota, said, “Because Toyota had been focusing on growth too much, we neglected the quality of our products.” The important thing is the quality of products rather than the quantity of products. Consumers want cheaper and better quality products but prefer good quality and secure products. I think that all companies need to recognize the importance of the quality and safety of their products through the Toyota crisis.
