Toyota- at least in my opinion- was supposed to be the safe and reliable car, which is why people would buy them. They were the safe, reliable care that one could keep for 20+ years, however already there seems to be some serious damage to their sales because of this recent news.Toyota last week recalled 2.3 million vehicles spread across eight of its models because of problems with a sticking accelerator. Then on Tuesday night it said it would stop selling those vehicles for an indeterminate period as it scrambles to find a solution.
The models affected include the company's three best sellers in the United States -- the Camry, Corolla and Rav4 SUV. Between them, they accounted for more than half of the Toyota brand's U.S. sales in 2009.
Five North American plants will halt production of these vehicles. The five plants have 14,000 employees, but they will be given training and other duties for the week of Feb. 1, according to Toyota spokesman Mike Goss. Asked about the potential for layoffs, Goss would not speculate what Toyota will do if the sales halt extends beyond that week.
Shares of Toyota Motor fell 4% in Tokyo Wednesday while Toyota (TM) shares that trade in the U.S. on the New York Stock Exchange were down 7% in late morning trading.This may be a blessing in disguise for the American auto-industry though. With a sudden drop in Toyota sales, both G.M and Ford sales may pick up drastically. How might this affect out economy, if at all? Might this prevent you from buying a Toyota in the near future, or will you just shrug it off?
I have to wonder how things like that slip past the radar, even well into production. It would be one thing if the windows got stuck occasionally, but a sticking accelerator sounds pretty serious.
ReplyDeleteThis happened because Toyota expanded with the goal of efficiency in mind, so all their cars share similar parts like the gas pedal. This is a blessing to Detroit because these companies will sell cars to people who need them now and can't wait for the new pedals to come out. However, it may hurt Toyota's American plant workers. I also don't think that this will hurt Toyota's reputation too much because almost all cars have something under recall no matter the brand. Cars are big, expensive, and complicated machines so it seems only natural that every once in a while repairs are needed to be made.
ReplyDeleteWith three of its best selling car models off the market, 2.3 million of its customers receiving full refunds (and likely an urge to buy a different company's car as a replacement), and incalculable damage to its formerly excellent reputation for producing safe, reliable cars, I'm surprised that Toyota's stock went down by so little. There's no doubt that such a serious setback for Toyota will prove a huge opportunity for its competitors to gain market share, and an excellent chance for the Big Three to make up for their past mistakes, and hopefully develop a more sustainable position in the automotive market
ReplyDeleteI'd say 9% is a pretty substantial drop..
ReplyDeleteI'd also say this could be a pretty smart move by Toyota. Think of all the lawsuits that could further humiliate the company as a result of accidents.
This is difficult to predict what customers would do but for me, I would probably shrug it off if I was to purchase a car. Tastes of customers is one of the things that shifts the demand curve of Toyota cars but I don't think that a large number of people will have a complete change of mind with regards to Toyota vehicles.
ReplyDeleteIf the automotive industries of the United States wants to make their comeback, they have to start making more rigorous campaigns, finding the advantages that Toyota has over them such as price and models and try to improve these problems in the market whilst their competitor is still recovering. The main thing that drives the demand of a customer is the price of the product and the level of their income. Today's recession makes matters even worse, many people are not willing to buy an expensive car even if it may be "safer" or locally made. If the prices of Toyota vehicles are cheaper, I strongly believe that most Toyota customers will still have a demand from Toyota despite these defects. A,T
I did a little bit of research (looked it up on yahoo news) and learned that,"Sean Kane, director of Safety Research and Strategies, a consumer group that conducts research into motor vehicle safety issues, said his firm has identified 2,274 incidents of sudden unintended acceleration in Toyota vehicles leading to at least 275 crashes and 18 deaths since 1999." How could this have gone on for 11 years without anyone, especially the government, noticing? I understand that, statistically speaking, 275 crashes, and 18 deaths might not be all that many. But these aren't just statistics. 18 people are DEAD, dead because, through no fault of their own, their vehicles went out of control. Quite honestly, with this incident, the incident of the man attempting to blow up an airplane (failing only because of a faulty bomb), and the lead tainted toy scare not long ago, I can't help but feel that our government, after spending millions of dollars, imposing new restrictions upon our rights and freedom, and seriously inconveniencing countless airplane passengers, could do a much better job of protecting its citizens.
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ReplyDeletesorry, forgot to post a link to the article I referenced http://news.yahoo.com/s/ap/20100128/ap_on_bi_ge/toyota_recall
ReplyDeleteToyota is expected to make reliable cars, so naturally when they don't, and the reason for people buying their product is deleted, they have no advantage.
ReplyDeleteNo company is perfect, and mistakes are abundant in the manufacturing industry. This does however seem like a potentially life threatening problem. I'm glad I don't need to buy a car soon; because it seems like the best choices are becoming more and more limited.
This unbridled mishap is the result of Toyota forcing open a wider market share at the cost of quality, and it comes at a perfect time to boost Ford's market share. Between 2010 and 2013 For is set to replance 25% of its current lineup while Toyota is only replacing 17% this on top of new Ford ratings that have put the American company in line with Toyota and Honda in many respects in regards to product satisfaction will lead to a slight rebound in Detroit.
ReplyDeleteI believe this is a good chance for the local car sellers to increase their sales, but I don't think it will hurt Toyota profoundly. Actually this is a quite wise decision, since it helped keep Toyota's reputation in the long run.
ReplyDelete"Toyota- at least in my opinion- was supposed to be the safe and reliable car, which is why people would buy them. They were the safe, reliable care that one could keep for 20+ years, however already there seems to be some serious damage to their sales because of this recent news."
ReplyDeleteI agree completely. We'll have to keep watching to see if this is going to damage Toyota in the long run. Eventually, however, I believe people will forget about this particular recall. If it happens again, best of luck to Toyota...
"Might this prevent you from buying a Toyota in the near future, or will you just shrug it off?"
This would definitely be in the back of my mind if I were considering buying a Toyota... however I have an extremely reliable Chrysler at home, and I'll probably stick with that for a long time.
E, A