With the recall of 1.1 million Corollas and Corolla Matrixes, model years 2005-2008, in August 2010, Toyota has now recalled more than 11 million vehicles worldwide since November 2009. Through a series of glitches with sticking floor mats, faulty pedals that caused instances of unintended acceleration, and now malfunctioning electronic control modules, the company's reputation has taken a beating with consumers.
The immediate effect of the initial public relations nightmare was evident in January 2010 when Toyota sold less than 100,000 vehicles, the company's worst month in more than a decade. Sales of the Camry plummeted 24 percent, with the full-sized Tundra pick-up off 45 percent. It became obvious that Toyota had a major job ahead to regain buyer confidence.
Initially, the automaker launched an aggressive campaign of print and television ads mixed with online efforts. For instance, president of motor sales for the company in the United States, Jim Lentz, did a segment of Digg Dialogg on February 8, 2010 that received 1 million views in the first five days. In fact, Toyota raised its advertising budget by 23.3 percent in response to the recalls, marshaling a $527.7 million campaign to rehabilitate its image.
In July 2010, a group of American media received an invitation to tour the company's Japanese headquarters as part of a safety and quality seminar. There, the writers and reporters visited the Toyota test facilities and were allowed to question managers and executives about product development and processes for quality assurance.
All noted a marked change in the attitude of Toyota engineers who now acknowledge they do not know all there is to know about how customers use the company's products or how different driving conditions and uses place unique stresses on the vehicles. Overall, a renewed commitment to listen to consumer feedback was evident.
In April 2010, Toyota established Swift Market Analysis Response Teams (SMART) to follow up on all customer complaints, initially those involving "unintended acceleration" in particular. The teams included product engineers and field technical specialists. This move was concurrent with the admission that the company grew too rapidly over the past decade and failed to adequately train its quality assurance personnel. A new layer of assistant managers has been put in place to address these gaps and specifically to reinforce Toyota's quality mission. These efforts coalesced in the formation of a new Design Quality Innovation Division headed by Katsutoshi Sakata.
Although new degrees of oversight procedure may slow the development cycle, Toyota responded to its recall crisis not just by throwing advertising money at the problem. There has been a core shift in the company's corporate structure and open admission of mistakes that should serve the company well in the long run. Of course, safe products are the only thing that will bring consumers back to Toyota showrooms and that reliability will have to be proven in practice over the coming months or even years.