Reputation for quality at Toyota gets dinged

Automaker recalls more than 2 million vehicles this year, and still has four months to go

August 24, 2006|By San Antonio Express-News


SAN ANTONIO --Toyota's vaunted reputation for quality has taken a pounding lately.

More than 2 million of the Japanese automaker's vehicles have been recalled worldwide, and there are still four full months to go in the year.

Some analysts say Toyota will be able to shrug off the quality questions, thanks to decades spent building its reputation for reliability. Others say Toyota is on the cusp of falling into a funk that could be hard to surmount.

"It's gonna be interesting to see what's going to happen in the next six months," said Karl Brauer, editor-in-chief of automotive Web site "They are right at that tipping point."

Bill Kwong, a Toyota Motor Corp. spokesman, said, "We're definitely very serious about customer satisfaction and quality."

Toyota has instituted all the recalls that have been reported to the National Highway Traffic Safety Administration.

The administration reports that more than 627,000 Toyotas have been recalled this year in the United States, including the highly popular Lexus RX sport utility vehicle and Toyota Prius hybrid. Yet Lexus was the top brand for dependability in J.D. Power and Associates' annual study of vehicle dependability. Toyota also improved one spot to fifth from sixth on last year's study.

Toyota's problems per 100 vehicles fell from 196 in 2005 to 179 in 2006.

The industry average this year was 227.

"[Toyota] has an incredible reputation for quality that they've earned," said Catherine Madden, senior analyst for Global Insight, a forecasting company. "It's something that doesn't dissipate in a day."

The questions about Toyota's reputation have become more frequent as the company has been defending itself through spring and summer.

It all started in the spring with a sexual harassment scandal at the company's North American headquarters. A $190 million lawsuit has since been settled. Then law enforcement officials in Japan were investigating whether Toyota had turned a blind eye to quality issues when one of their vehicles was involved in an accident involving serious injury.

Add to that recalls of Highlander SUVs and Prius hybrids, and the summer just gets longer.

Better than 2005

Still, Toyota is having a better year in 2006 than it did in 2005, according to figures from NHTSA. Last year, Toyota had 12 recalls of more than 2 million vehicles. One of those involved nearly a million vehicles built as far back as 1989. But a recall of more than 768,000 involved trucks and SUVs no older than 3 years.

Brauer, of, said it's understandable to have older vehicles show up in a recall. Every automaker has something that turns up over time. New vehicles having problems are tougher to explain away, he said.

Toyota's mercurial growth may be contributing to some of the recent recalls, said Global Insight's Madden.

"Toyota, just like any company, has created a manufacturing system that is set up to eliminate any and all quality issues due to its structuring," she said. "But no one is immune [from mistakes]. The faster you're trying to grow, the more you're increasing the chances [for mistakes] by the volume you're producing. I don't think anyone is immune to a quality issue."

Toyota is rapidly expanding its manufacturing footprint, especially in North America. The company has 12 manufacturing plants in North America and is building two more: one on San Antonio's South Side and one in Canada. It also will start building Camrys at Subaru of Indiana Automotive next spring.

By 2008, Toyota will have the capacity to build nearly 2 million vehicles, 1.44 million engines and 600,000 automatic transmissions annually. That kind of capacity leaves plenty of room for error.

A saving grace

Brauer said Toyota's saving grace has been its ability to get out ahead of most of its problems before someone gets seriously hurt or killed.

"Toyota is pretty good about recalling before, versus after, the bomb goes off," he said, alluding to Ford Motor Co.'s Firestone tire debacle of a few years ago. "Toyota is very conservative. They'll jump out ahead of these things instead of waiting too late. A pre-emptory recall is much better than a cleanup."

Ray Tyson, a spokesman for NHTSA, said there is no pattern when it comes to recalls. But he said more and more recalls are coming from the manufacturers, as opposed to his agency, thanks to new reporting procedures that have been in effect for several years.

"They have been required by law to submit quarterly reports of warranty claims," Tyson said. "Since they have had to supply that data to us, they've become much more sensitized to studying those claims. It has increased the number of voluntary recalls, and they spend more time looking at trends."

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