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Teflon Toyota

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Link to full article @ Forbes.com

Teflon Toyota

Joann Muller and Jonathan Fahey 07.03.06

Consumers don't seem bothered by a rash of recalls.

Here's a quiz: a carmaker last month recalled 1 million vehicles worldwide. In 2005 it recalled 2.2 million vehicles in the U.S., 10% of its total number of cars on the road here and twice the number it recalled the year before. Who is this bumbling manufacturer? No, not General Motors (nyse: GM - news - people ), but Toyota (nyse: TM - news - people ), whose vehicles jump off the lot because consumers swear by their quality. Just a few weeks ago Toyota again dominated consumer polls in the annual J.D. Power & Associates initial quality study.

Why this disconnect? The answer says something about the nature of recalls and how Toyota handles them. For one thing, the spike in recalls stems from Toyota's own efficiency. Rather than reengineering parts, it shares components among many models. So when something goes wrong, as it did recently with the steering shaft on the Prius and ten other (non-U.S.) models, the recall number is high.

Toyota, moreover, has perfected the art of detecting and fixing quality problems early, often before customers even notice them. "What we tend to see is that if a customer receives a recall notice before their car exhibits any symptoms, they don't see it as a problem," says Chance Parker of J.D. Power. It counts as a recall, for sure, but the Power surveys are gauging consumers' level of satisfaction. And Toyota knows how to keep customers satisfied. It gives its dealers plenty of leeway to fix customer complaints even postwarranty--by some accounts as much as $3,000 per vehicle.

Despite the headlines, it's not clear that Toyota's recall numbers are any worse than those of the other carmakers. The amount it spends making good on warranties is 1.2% of revenues versus 2.4% for GM and 2.3% for Ford (nyse: F - news - people ). Last year when Toyota had 12 recalls, covering 2.2 million vehicles in the U.S., GM had 30, covering 5.1 million, and Ford had 17, covering 6 million ( see story, p. 102).

No question that Toyota's remarkable growth has hit some bumps. Consumer Reports dropped the reliability rating on its newly redesigned Avalon from "much better than average" to "average." Even Toyota management wonders whether it has the bench to guide its growth. But for now quality doesn't seem to be an issue.

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toyota = "bumbling". :D

I likey.

BTW... how is it the article date is July 3rd? Wasn't the 1-million car toyota recall within the last 2 weeks, not "last month"? Are the referenced Initial Quality results really from last month too? Does anyone see an intent to portray the recall as not having an effect in the IQS opinion poll when the 2 happened at nearly the exact same time?

I no likey.

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I have no real evidence of this, but I think the domestic brands have been better about recalls than the imports have - in general. Even though the domestics, historically speaking, have had more recalls, I don't think that really means that they had more problems. The domestics just seem more willing to issue recalls than the import brands... and imo, that's a good thing for the domestics.

I REALLY think that as Toyo nears claiming the #1 position in sales, their quality issues come to light more, & society starts to figure out that they're not as "green" as we think they are, the press will begin to give a more balanced view of GM (and every other brand.)

What I'm wondering, however, is how do you get the press to say something negative about BMW? Most articles sound like driving a BMW causes instant orgasms.

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Halting the all-expenses-paid trips to the Bavarian countryside and getting wined-n-dined just to drive a model that'll be clogging the roads here all too soon might help.

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Halting the all-expenses-paid trips to the Bavarian countryside and getting wined-n-dined just to drive a model that'll be clogging the roads here all too soon might help.

Good point.... maybe GM & Ford need to provide test drives in Maui. The roads there are incredible & though I've never been to Bavaria, I'm quite certain the scenery & accomodations are nicer in Maui!

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Yes, going to test a Mercedes on the Autobahn, a BMW in the Black Forest, or a Volvo is Scandanavia is a bit more exotic than taking a spin around Janesville, Oshawa, or Orion Township.

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LOL at some of the responses.

Even so, Toyota's growth is coming at an expense and it needs to slow down until everyone who designs and assembles cars has time to adjust.

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Why this disconnect? The answer says something about the nature of recalls and how Toyota handles them. For one thing, the spike in recalls stems from Toyota's own efficiency. Rather than reengineering parts, it shares components among many models.

Oh give me a BREAK!!!!!!!

Where was this REVELATION when the media was dragging Detroit through the dirt for recalling multiple models?!?!?!?!

Efficiency my ass......

So when something goes wrong, as it did recently with the steering shaft on the Prius and ten other (non-U.S.) models, the recall number is high.

It never mattered with GM's GMT360 platform....

Toyota, moreover, has perfected the art of detecting and fixing quality problems early, often before customers even notice them. "What we tend to see is that if a customer receives a recall notice before their car exhibits any symptoms, they don't see it as a problem," says Chance Parker of J.D. Power.

Okay, whatever....

It counts as a recall, for sure, but the Power surveys are gauging consumers' level of satisfaction. And Toyota knows how to keep customers satisfied.

That is, until they visit the dealership...

Despite the headlines, it's not clear that Toyota's recall numbers are any worse than those of the other carmakers. The amount it spends making good on warranties is 1.2% of revenues versus 2.4% for GM and 2.3% for Ford (nyse: F - news - people ).

You know... It's pretty obvious that Toyota PR is kicking into damage control. Both this and the BusinessWeek article present these SAME facts and quotes... So, essentially, Toyota BAITS the media with what to say and our DUMBASS media followers like a retarded 3 year old.

No question that Toyota's remarkable growth has hit some bumps. Consumer Reports dropped the reliability rating on its newly redesigned Avalon from "much better than average" to "average."

LOL... The new Avalons are falling apart (Literally) and CR ***STILL*** rates it at average... So much for "Unbiased car ratings"

Even Toyota management wonders whether it has the bench to guide its growth.
But for now quality doesn't seem to be an issue.

Umm, okay, a spike in RECALLS and the number of RECALLED vehicles for 2 consecutive years, and most of them being NEW, limelight models as well, APPARENTLY isn't anything to be worried about... Yep, that's PERFECT!!!! Keep that attitude up Toyota!!! It's the SAME mistake Detroit made.

As for Forbes... This entire article, the last sentence especially, just serves to reinforce insecure YUPPIES that the "Better than thou" brand of choice is still; just that. Godf forbid their simple little egosd be busted and ruined...

I'm glad that the media is now effectively, like everything else, JUSTIFYING recalls in order to hide YET ANOTHER Toyota shortcoming and LIE. Pretty soon, maybe it'll be okay for people to die when their Prius stalls on the freeway.

I can see it now:

"20 people have died in their Prius, but so far so good as Toyota is the place to be for worry-free motivation. In essence, safety doesn't matter."

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Mazda debuted it's RX-8 to the press in Hawaii and I remember one writer compalined endlessly how it was the worst place to debut a sports car since the roads are so heavily patroled. Perhaps debuting a car in the middle of the night on a lone Montana highway would be the way to go?  :scratchchin:

Oh, that's just nuts. There are areas in Maui that almost NEVER see cops. In fact, we drove for about 2 hours straight & didn't seen another car, much less a cop. The legendary "Road to Hana" is every bit as exciting as the Tail of the Dragon. That road-tester should have spent a little more time exploring.

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Oh give me a BREAK!!!!!!!

Where was this REVELATION when the media was dragging Detroit through the dirt for recalling multiple models?!?!?!?!

Efficiency my ass......

It never mattered with GM's GMT360 platform....

Okay, whatever....

That is, until they visit the dealership...

You know... It's pretty obvious that Toyota PR is kicking into damage control. Both this and the BusinessWeek article present these SAME facts and quotes... So, essentially, Toyota BAITS the media with what to say and our DUMBASS media followers like a retarded 3 year old.

LOL... The new Avalons are falling apart (Literally) and CR ***STILL*** rates it at average... So much for "Unbiased car ratings"

Umm, okay, a spike in RECALLS and the number of RECALLED vehicles for 2 consecutive years, and most of them being NEW, limelight models as well, APPARENTLY isn't anything to be worried about... Yep, that's PERFECT!!!! Keep that attitude up Toyota!!! It's the SAME mistake Detroit made.

As for Forbes... This entire article, the last sentence especially, just serves to reinforce insecure YUPPIES that the "Better than thou" brand of choice is still; just that. Godf forbid their simple little egosd be busted and ruined...

I'm glad that the media is now effectively, like everything else, JUSTIFYING recalls in order to hide YET ANOTHER Toyota shortcoming and LIE. Pretty soon, maybe it'll be okay for people to die when their Prius stalls on the freeway.

I can see it now:

"20 people have died in their Prius, but so far so good as Toyota is the place to be for worry-free motivation. In essence, safety doesn't matter."

Future of GM, you are the truth!! I always enjoy your commentary. I agree 100% with all the comments.

People don't buy cars because of style, performance or even quality anymore. People buy cars for status quo. Unfortunately, it is more classy to be seen in a Mercedes than a Caddy, a Lexus than a Buick. However, Mercedes, like toyota, has had an onslaught of problems since the 90's regarding the electronics in their autos. But people still put them as the 'aspirational' brand to designate when one has arrived.

I have 87,000miles on my 01' regal and I just got a tune-up. Still have not replaced: Serpentine belt, original tires, water pump, or any other item that can be all too typical of new car breakdowns. I have, however, seen a resurgence of power since I got my tune up. The 3800 still kicks ass at the stop light and I have the rear-view mirror images to prove it. Is this a glitch? Probably as much a glitch as my 1990' park avenue, my very first car, which had 147,000 miles when I bought it in 99' and served me with duty and dilgence until I graduated college and gave it to my brother(with 189,000miles on it and drove it until 221,000 miles)

Call me stupid, call me stubborn, but I will remain a faithful GM consumer until GM stops serving me the way they have for the 7 years I have been a vehicle owner. 3rd GM vehicle and I have yet to be left stranded. Other peoples negative perceptions of GM vehicles have(to GM's demise) helped these cars to depreciate far faster than their toyota counterparts. While it ain't good news for GM, its a helluva deal for me!!

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