Toyota Motor Failure

Problem in electronic safety system of the 2010 model-year Prius, after Toyota released the Prius, the drivers who bought them, they was difficulty braking. Some owners have reported experiencing inconsistent brake feel during slow and steady application of the brakes on rough or slick road surfaces when the anti-lock brake system (ABS) is activated in an effort to maintain tire traction. Some drivers were unable to stop it while driving. The Prius drivers got the same problem and many drivers shared the experience to the social and news agency. Action: Recall the problem cars

For showed the responsibility, Toyota has announced the recall of about 436,000 hybrid vehicles worldwide, including its latest Prius model, to fix brake problems. Finally, the vehicles were recalled more than six million vehicles globally after faulty brakes and accelerator pedals while the president of Toyota profusely apologized about this problem and took it to personal responsibility. Moreover, Toyota has said it will listen more carefully to customers and respond faster to complaints after the recall of problem cars over safety fears. Effect on the company

The recall made a difficult time for Toyota, this situation decreased in the sales of Toyota and forced the low exchange rate from yen to US dollar. On the day that the recall was announced in the US, it was announced that 750 jobs will be cut at Toyota’s British plant. It showed that each Toyota dealership in US would lose about $2 million per a month in revenue, a total loss of $2.47 billion on the country from the entire incident. In addition, Toyota faced losses totaling around $2 billion from lost output and sales worldwide and Toyota’s shares fell in value by 15%. For the Toyota owners may also be affected by this recall, negatively affecting in the resale value of used cars.

Toyota got loss of company’s image from this situation, many drivers did not trust on Toyota’s car safety and some did not buy the Toyota car in that period time. The Rasmussen poll on that time showed, Toyota is viewed favorably by 59% of Americans and 22% viewing for Toyota is very favorably. The rest 29% view for Toyota is unfavorably. Moreover, the poll showed 38% disagreed and 39% were unsure to own a new Toyota car.

Industry analysts commented and noted that the recall response was a challenge for the Toyota Way manufacturing philosophy, because the recalled parts did not come from factory errors or quality control problems, but rather because of design issues and suppliers leading to the problem and customer complaints. As a result, better communication of consumer issues with management are needed and monitoring on the suppliers being on the specifications and requirements in each products are also required when outsourcing, the global quality committee aimed to be more responsive to consumer concerns.