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‘A devastating blow' -- Analysts weigh in on Toyota's crisis

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‘A devastating blow' -- Analysts weigh in on Toyota's crisis

Automotive News Europe -- January 28, 2010 06:01 CET

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DETROIT (Reuters) -- Here are some comments from industry analysts on the impact of Toyota Motor Corp.'s decision to suspend U.S. sales of eight models subject to a safety recall and halt production of the models in North America for at least the first week of February:

Jake Fisher, automotive engineer, Consumer Reports

"It can take years or even decades to build a reputation for quality and reliability, but only a single event like this can erode it.

"I think this is going to be very difficult to overcome. There are so many good choices out there for consumers to pick right now when we still have so much overproduction. This could definitely have some long-term effects for them.

"Toyota is trying very hard to do the right thing and being bold and having large recalls to portray the fact that they are willing to stop at nothing and spare no expense so nobody gets hurt in their vehicles.

"But they had issued recall after recall. They've talked first about the floor mats and the pedals that are too long and now they are talking about pedals that stick. They are really not quite sure what is the underlying problem.

"Toyota has built this reputation on quality and reliability and safety and being a practical choice. When consumers start questioning that, it really can damage them in terms of reputation, especially when Hyundai, Ford, Honda, Subaru and Nissan offer great choices and are coming up in quality ratings."

Brian Johnson, analyst, Barclay's Capital

"Based on conversations we had with Toyota, it doesn't look like Toyota has come up with a definite fix for the problem yet, so the initial announcement of a one-week plant closure could potentially be followed by more.

"We expect that the suspension in deliveries of these eight models will negatively impact late January and February U.S. sales for Toyota, but boost sales of these models' most direct competitors."

Dennis Virag, president, Automotive Consulting Group

"It's a devastating blow to Toyota and Toyota's reputation. Toyota is the new General Motors in terms of experiencing quality glitches, over-expansion and the proliferation of new product models.

"Toyota has been too aggressive and perhaps complacent in terms of focus on quality. They can't concentrate on the details with so many models."

Kurt Sanger, analyst, Deutsche Securities

"You can't just stop selling these models and not expect some impact to your market share -- at least in the short term.

"Will it help certain brands gain share in the short term? Yes. I'm sure every Hyundai dealer in the U.S. is letting customers know about their improvement in quality, and by the way, 'Guess what happened across the street?'"

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100128/COPY/301289964/1147#ixzz0dvCdQM58

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"Toyota is trying very hard to do the right thing and being bold and having large recalls to portray the fact that they are willing to stop at nothing and spare no expense so nobody gets hurt in their vehicles.

This is a load of crap. They have been HIDING everything they can and only admitting to it when they are forced to by the government.

They are really not quite sure what is the underlying problem.

Come ON! Consumer Reports, you guys should be smarter than this. If GM or Ford or Chrysler had a problem like this, you guys would be FULL STEAM AHEAD at trying to crucify them!

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Here is the letter I'm writing to Consumer Reports

I am very disappointed in Consumer Reports' Jake Fisher. In an article that I found at: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100128/COPY/301289964/1147#ixzz0dvCdQM58.

Mr. Fisher plays it easy and soft on one of the largest and most dangerous safety flaws in automotive history. My family has been loyal subscribers for as long as I can remember and it is extremely frustrating for me to have to read a half-page caveat on why Consumer Reports cannot recommend the Cadillac CTS because it squeaks and rattles, yet multiple recalls, on millions of vehicles, that is now appearing to be more and more like a cover-up gets the pass from Mr. Fisher.

Mr. Fisher says: "Toyota is trying very hard to do the right thing and being bold and having large recalls to portray the fact that they are willing to stop at nothing and spare no expense so nobody gets hurt in their vehicles." I would expect something more harsh and pointed from consumer advocates. I would also expect that Consumer Reports did some more investigation on this subject as it not only affects Toyota owners, but clearly any driver on the road that is near one of these vehicles. For the first time yesterday, I looked around and thought about what it would be like to see a Toyota zoom past me on a roadway out of control because there is no real solution to the problem.

It is depressing and troubling to me that you are harder on Cadillac and General Motors for rattles and squeaks than you are on Toyota for making millions of vehicles with a dangerous problem that Toyota is actually unwilling to solve.

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My own public response on my other blog, The Auto Economy

For those three of you who haven’t heard, Toyota has issued a massive recall over a possible sudden acceleration issue that infects the top eight selling models in their lineup. This has started the tongue and keyboards wagging in the automotive press with some rather interesting commentary.

Jake Fisher, and automotive engineer at Consumer Reports stated in an interview to Automotive News that “”Toyota is trying very hard to do the right thing and being bold and having large recalls to portray the fact that they are willing to stop at nothing and spare no expense so nobody gets hurt in their vehicles.” and “Toyota has built this reputation on quality and reliability and safety and being a practical choice.”

Toyota “trying very hard to do the right thing” would have been addressing the issue when they allegedly knew about it as early as 2004. Having massive recalled 6 years after the problem began surfacing and after multiple people have lost their lives isn’t “trying very hard to do the right thing”

Also, doing a recall and stopping production when you know you are legally required to do so is not the same as doing so voluntarily.

One last thing Consumer Reports, Toyota didn’t build their reputation for quality, you built Toyota’s reputation for quality. Toyota has been having quality issues for years with sludging engines, failing transmissions, exploding camshafts, premature rusting, wheels falling off, and cracking frames, all the while resisting responsibility and blaming consumers. All this time you’ve given them passes for these issues and only jump on the reality train once Toyotas started killing people.

Toyota doesn’t have the reputation for quality you proclaim with anyone who reads just about any publication other than Consumer Reports.

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Good grief, Consumer Reports strikes again.

I'm curious how this ten-year old SUA problem, resulting in 2,274 identified incidents in Toyota vehicles leading to at least 275 crashes and 18 deaths since 1999 that has amounted to the biggest recall in automotive history, still seems to get a pass from Consumer Reports.

"If you don't have that problem [rough actuating or slow-to-return pedal], I would probably say it's probably fine to keep driving your Toyota because this really only happens in rare instances," said Rik Paul, automotive editor at Consumer Reports. "If you do experience any roughness in the accelerator pedal, don't drive it any more and take it to your dealership."

Since when did Consumer Reports advocate rolling the dice?

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