Toyota's Reputation in U.S. Tarnished by Recall, Lawsuits

      October 06, 2009 08:28

      This fall has been tough for Toyota, which had already been suffering from a strong yen amid the global financial crisis. On Sept. 30 the Japanese automaker recalled 3.8 million Lexus and Toyota cars sold in the U.S. since 2004 because of potentially deadly floor mats. It is the largest ever recall in the company's 72-year history.

      The removable driver's-side mats were responsible for a series of accidents when they slipped forward and jammed accelerator pedals. Industry experts say that changing the mats will cost Toyota some W50 billion (US$1=W1,174), but perhaps even more serious is that the problem has sullied Toyota's reputation as a top-drawer automaker. The company has been blasted by the U.S. media for having been aware of the flawed mats for two years before deciding on the recall.

      In another case, Toyota was sued last month by a former in-house attorney in the U.S. who says the company concealed evidence that some vehicles have insufficiently strong roofs and fabricated crash data on the defect. Also, an American woman recently sued the carmaker and its ad agency Saatchi & Saatchi for a series of aggressive marketing e-mails which she claims "terrified" her.

      While making news with these mishaps, Toyota saw its sales drop 13 percent in the U.S. last month. The carmaker's president, Akio Toyoda, said during a lecture in Japan on Friday that his company has grown too big and is drifting away from consumers. Toyota invented its own management philosophy called the Toyota Way and has become a role model for carmakers worldwide. Many are now interested in seeing how the company will overcome its current troubles.

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