About scapegoats and the true need for winning back consumer trust

In China, Toyota has already been haunted with multiple requests for recalls before the infamous gas pedal problem, and quite a few observers claim that with these latest complications the Japanese car maker's reputation in the mainland is now enduringly shattered. Indeed, according to a TNS Automotive survey among Chinese car owners and purchase intenders, a majority of consumers claim that their confidence in Toyota has been affected by the quality problems, and that the current recall practice has degraded their image perception of the Japanese car make. However, they also acknowledge that with the decision to recall its cars, Toyota has demonstrated to be a responsible enterprise that reacts quickly and with a sincere attitude to the difficulties. This can be read as an indication that there will be an impact in sales in the short-term, but a limited damage in a medium- and long perspective, provided that Toyota continues to handle this crisis well. Consumers will eventually be ready to forgive the current quality problems, as long as they feel honesty and seriousness in tackling the difficulties. Chances are that Toyota will be able to recover and regain full strength in the next years to come.

This does not make the initial reason for the product recall, most prominently the sticking gas pedal, any better, though. Faulty products that compromise safety are a serious matter, and the car maker has to take full responsibility for it. However, defaults in automobiles built together in a complex process of assembling hundreds and even thousands of parts are not exclusive to Toyota, which is why product recalls in the automotive industry are common and frequently used to rectify these deficiencies. Last year in China, beside Toyota a series of other car manufacturers have also recalled their vehicles, such as Soueast Motors, Kia, Nissan, VW, Volvo, even BMW, Maserati, and Jaguar, sometimes due to serious issues like airbag- or steering system defects.

The well publicized Toyota case reveals a symptom of today's reality in the entire auto industry: Accelerated product life-cycles and cost reduction efforts put enormous pressure on product quality as new parts have to be designed and manufactured in ever shorter intervals and at lower expenses, and this does not remain innocent with regard to the maturity of conception, level of precision, and quality of materials. All car manufacturers walk on a narrow path between ensuring competitiveness and providing good enough product quality, and hence, the universal validity and rising frequency of product recalls, in particular since General Motors' José Ignacio Lopez has made in the early 1990s heavy-handed requests by powerful purchase departments for price discounts a common practice.

That Toyota is now severely criticized and made the industry's scapegoat has a political dimension. Since its arrival in the United States half a century ago, Toyota has succeeded to seriously challenge the American car makers, and with more than 2.2 million vehicles sold in 2009 it has even outperformed General Motors for the number one position in the US market. After its bail-out early 2009, GM is now mainly government owned, and we cannot deny a certain conflict of interest for the U.S. Administration in handling the recall issue. Keeping consumers as long as possible aware of Toyota's quality problems ensures maximum benefit for the American car maker.

This political connotation makes it difficult to assess the real technical implication of the recall activities. While a problem with the gas pedals seems to be confirmed, and a product recall then is fully justified, a genuine insufficiency regarding the braking system of the Prius has not yet entirely been established. And what about the alleged steering defects in the Corolla? Could it be that consumers have become extremely sensitive, and that there is a media hype happening around a few complaints?

If there is any good in Toyota's quality nightmare then that there can be transparent clarification of facts and implementation of improvements. It is a chance for the entire industry to reevaluate the "customer first" approach - serving and taking responsibility for the millions of car owners across the globe. It is not about finding scapegoats, but about truly winning back consumer trust.