Retail Front

Toyota Takes Turn in Barrel

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If an auto maker is big enough and sticks around long enough, eventually it takes an unwelcomed ride in the barrel.

Typically, General Motors, Ford and Chrysler take turns, although GM and Chrysler shared a twin spin last year.

Now it is Toyota’s turn to tumble, as it deals with a huge recall and bad press from sticking gas pedals. Who would have thought Toyota, the perceived king of quality, would get in a jam like that?

Toyota notes sudden accelerations from malfunctioning pedals are rare indeed. Even so, the auto maker has recalled 2.3 million vehicles, stopped sales and halted production.

That’s because certain hot-button situations – such as runaway cars – grab people’s attention and hold it.

Auto makers can cope with recall frets, such as electronic glitches or quirky pumps.

But sudden acceleration of a car that seems to possess a demented mind of its own? Reports of a Lexus pitching off a parking deck? That’s right up there with exploding Ford Pinto gas tanks.

Ford had a nauseous barrel ride when news of those incendiary occurrences hit the street in the 1970s. Headlines got worse with the uncovering of an internal memo from a Ford attorney who callously calculated it would cost less to pay off wrongful death suits than fix the problem.

Some people criticize Toyota for not acting faster with its problem, but the auto maker is straining to do the right thing now.

“Nothing is more important to us than the safety and reliability of the vehicles our customers drive,” says Jim Lentz, president of Toyota’s U.S. operations. Anyone who knows Lentz, knows he’s not blowing smoke.

Will Toyota suffer irreparable harm from this mess? Well, Toyota owners, who had thought God made their cars, may question that belief now. And Toyota has much repair work to do, not just on its cars but on its reputation.

It already is seeing other auto makers smelling blood and going after its market share. “I got to wonder, do Hyundai folks keep Camry-shaped voodoo dolls around their offices?” an industry pal asks me.

The good news for auto makers is that, although the duration and speed of the barrel ride varies depending on the severity of the crisis at hand, the ride stops and the dizziness ends eventually.

Look at Ford. Despite the exploding gas-tanks disaster of the 1970s and the SUV rollover debacle of more recent times, Ford has found its footing.

It just reported a $2.7 billion profit for 2009, overcoming the worst U.S. auto market in nearly three decades, avoiding a federal bailout and staying out of the barrel. At least for now.

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What's Retail Front?

Blogs about automotive retailing, commenting on news impacting the business of selling vehicles.

Contributors

Steve Finlay

Steve Finlay is the editor of WardsAuto Dealer Business magazine. His journalism career started 40 years ago as a crime reporter. A Michigan native, he likes fast cars, big lakes and cold days.

Jim Ziegler

Jim Ziegler, president of Ziegler Supersystems, is a trainer, commentator and public speaker on dealership issues.
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