Friday, February 5, 2010

Oh, what a falling: Toyota!

The Korea Times is reporting that Korean consumer sentiment toward Toyota has started to cool:
Before Toyota's recall fiasco broke out last month, a prospective Camry buyer in Korea had to wait until August at the earliest to get a hold of the new sedan. Now, you can be cruising in one by April or May, local dealers say.

Toyota Motor Korea declined to give the exact number of cancellations occurring in the wake of the carmaker's biggest-ever recall affecting millions of cars worldwide.

But the company, which enjoyed immediate popularity after launching here in October, is apparently reeling from both falling sales and a major blow to its PR.

According to the Korea Automobile Importers & Distributors Association, local sales of Toyota vehicles fell sharply as the Japanese auto giant sold 441 vehicles in January, down more than 33 percent from the 660 sold in December.

The company currently sells its flagship Camry sedans, RAV4 sport utility vehicles and Prius hybrids on the Korean market.

The luxury Lexus brand also suffered a drop last month, according to the data, with sales plunging 37 percent from the previous month to 320.

Officials of Toyota Motor Korea and the Ministry of Land, Transport and Maritime Affairs clarified earlier this week that the carmaker's latest recall does not affect more than 19,000 vehicles imported and sold by Toyota's Korean unit.

But the faulty gas pedal still seems to have spooked local consumers.
The KT headline said that Korean consumers are "turning their backs" on Toyota, but if you've still got to wait until April or May to get delivery, I'd say there are still some enthusiastic customers out there. After all, Korean automakers are not immune to domestic recalls — the domestic-market Kia Carnival minivan we purchased as a "company car" ten years ago had an engine recall that none of us were aware of until the engine gave out and spewed some icky yellow gunk all over the Chungnang Expressway, after which we were given an all-new engine.

But the massive recall does come at a time when Toyota is just starting to make a name for itself with its mid-range cars (Lexus has been doing well in South Korea since at least the middle of the last decade), and that's going to hurt for a while, especially since Toyota's greatest marketing strength has been the synonymity with quality that it has built up over the past couple decades.

The irony there, from what I understand, is that the Toyotas and Lexuses sold in Korea (as noted in the article) are not subject to the recall because they were made in Japan, without the American-made pedals that we are told (by Toyota) are the central cause of the sticky accelerator problem. [This reminds me of something a cousin who worked at Toyota told me long ago, that they have significantly fewer problems with Japan-made Toyotas over American-made ones, and that as a consumer you should always look for a VIN starting with J when you buy; I'm having trouble finding it now (though I found this interesting four-year-old post on Hyundai's prospects in America), but one commenter at The Marmot's Hole scoffed at that idea.]

Still, they aren't 100% certain that it's a defective pedal causing Toyota's problems (some say it's the on-board computer), so it might be prudent to be a little skittish about buying a Toyota or Lexus.

Back in the States, Ford, General Motors and Hyundai/Kia stand to gain from this and they're even offering added incentives to people who bring in their Toyotas for trade-in. It seems people have forgotten all about Ford's own massive recalls that involve switches starting vehicle fires and tires blowing out and causing accidents.

Indeed, the Toyota recall is huge news here, a top story almost every day for the past week or so, it seems. Is Toyota getting a harsher spotlight because it's a foreign company? Because it has been so synonymous with quality? Or is Toyota being burned by its own good-faith efforts to do the right thing and stop sales of cars that had potential problems, putting customer safety ahead of profit, something that other companies have not always done so publicly (and expensively) in the past?

I think it's mostly #2 and especially #3 (essentially getting punished for doing the right thing), with perhaps a sprinkle of #1 thrown in. As a consumer that bothers me, because it provides a disincentive for companies to consider the public's safety over the company's coffers. It also bothers me because I like Toyota (on the Mainland, that's what I drive now) and I don't like to see this great company unfairly take a beating.

At any rate, as I noted when Toyota first announced suspension of sales, this is a must-take opportunity for Hyundai and Kia to review their own quality, lest some small defective part cascade into a serious problem from which Hyundai's or Kia's reputation cannot recover quickly or easily. It's good, then, to read in the Korea Herald that Korea's automakers are thinking along the same lines:
Hyundai Kia Automotive Group will conduct a massive product quality review in light of the developments at Toyota Motor Corp.

According the group, its two carmakers Hyundai Motor Co. and Kia Motors Corp. plan to make a special review on the quality of components supplied by parts makers and strengthen quality control systems.

The measures follow on the Hyundai Kia Automotive Group chairman Chung Mong koo’s comments that emphasized the importance of safety and quality, group officials said. Chung touched on the issue at a strategy conference on Monday.

Chung also issued orders to analyze the cause of Toyota’s troubles and to closely follow the developments to prevent such a situation being repeated at Hyundai and Kia.

The quality review process will begin with parts makers producing safety related components and expand to include manufacturers of other parts, with the aim of completing the process for all of Hyundai and Kia’s 500 or so suppliers within the year.

For the special reviews, the carmakers will also draw up quality control standards for their overseas suppliers.
Glad to hear it. Hyundai and Kia have lately become known for a mixture of quality, safety, and reliability, but it's not that far gone that people thought otherwise of Hyun-DIE and Killed-In-Action, and neither brand's image would recover nearly as fast or as thoroughly as I expect Toyota's to.

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