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Toyota Will they survive all these recalls?

Updated on October 18, 2011

Toyota recalls keep coming.

Toyota is still in a terrible pickle with recalls of runaway cars being only a part of their problems. So where does Toyota stand now?

  1. Vehicle recalls will cost Toyota billions in revenue.
  2. Their hard earned reputation for quality, safety and reliability is in tatters. Even their flagship Lexus -GS460-V8 has been recalled.
  3. As far afield as Australia Toyota is putting thousands more of it's cars off the road for safety reasons.
  4. Toyota still shows no solid understanding of what the problems are with their current models accelerator sticking open and it seems like problems with their vehicles will continue.
  5. They misled the public badly in the early stages of the recalls.

First it was supposed to be the floor mat getting jammed under the pedal that was the cause, then the linkage or the pedal itself was suspected and now they are fitting electronic over-rides in an attempt to solve the current dilemma of their cars accelerating out of control. We make the Camry in Australia for export, and the local Camry has the same problems as the others around the world.

The Toyota Camry and their 4 wheel drive range currently make up a huge proportion of sales in the USA and elsewhere, and these have been the models with the worst outcomes.

In their efforts to reduce supplier costs by 30% they used the same parts for many components, then shared those components across the models, leaving them open to the current problem of having millions of recalls more than if they had kept components separate.

Toyota first car AA

Toyota Crown 1955-61

Toyota Avalon 2011
Toyota Avalon 2011

Toyota's history

It is difficult not to feel a bit sad for Toyota. Started in 1937 and the first to introduce J.I.T (just in time) manufacturing, Toyota built it's business on manufacturing high quality products.

It's founder Sakichi Toyoda was born in 1867. His first product was the model G Automatic loom which he sold to an English company in 1929. In 1930 Kiichero Toyoda began research on a small gasoline engine which was the beginning of the cars we have today. By 1933 he had established an automobile division within Toyoda Automatic Loom works Ltd.

  • Toyota Motor Company was established in 1937 after having produced their first car the year before, the AA sedan.
  • The first plant began production in 1938.
  • In 1955 they made the now famous Toyota Crown Deluxe, the first prototype being exported to the USA in 1957.
  • In 1984 GM and Toyota began a joint venture. Production in the UK did not begin till 1992.
  • 1989 began the Lexus brand, and by 1999 domestic production for Toyota vehicles reached one hundred million.

Although known as the worlds largest manufacturer, that title probably belongs to the Indian car manufacturer Tata Motors in reality, but they are close.

The current Camry and Corolla have huge world-wide market share with America being one of it's largest markets.

Their Chairman has apologised to the American customers and is doing all it can to put a lid on the ever growing bad press it seems to still be getting daily.

Now their shiny new 4WD has been labelled as dangerous for other reasons. Apparently a consumer group has suggested it will tip over too easily and another nail goes in the coffin for Toyota!

Today I heard their CEO state that Toyota will emerge from this crisis to be even better than before, but that is a little hard to believe for several reasons at this stage. If they do survive it will be because of the internal strength that got them to the top in the first place, but several things stand in their way.

The stunning Toyota Volta and the new micro car

Toyota, profit and the real world

Toyota's are not cheap. Their prices are on a par with many other fine manufacturers as the pricing stands now, and this poses an obvious question

If cost cutting, (remember the 30% they saved in outsourcing and using shared components across models is the crux of their problems is discontinued,) how will they change this back and still retain price parity with competitors?

  1. They will need to dump margin to even stay in the market place, so where are they going to get profit from to rebuild this part of their manufacturing process at the same time?
  2. Other manufacturers will very quickly attempt to fill Toyota's market before they can re-establish reputation and market share.
  3. Toyota retailers will need to survive while this all takes place.
  4. This is exacerbated by the retail company being tightly tied to the manufacturing.

It is fascinating to think what grand plan they will come up with to bolt all this together, and in the car industry time goes by very fast indeed with new innovations from other companies threatening to leave Toyota behind before they can grab a new foothold.

If you have read my other car hubs you will see that I always thought the accelerator jamming open was an electronic problem, not mechanical.

I may be proved right. NASA has now given it's services to track down electronic problems that may be related to this failure. For Toyota's sake I hope I am wrong, and NASA find no electronic problems as finding a bug across the electronics will be a nightmare in my view, and this is why.

The possible combination of interactive failure from any of the interconnected modules that do everything from controlling cruise control to turning on the stop light switch could be a part of the glitch Which particular module is getting the first or last signal and why is a logistical nightmare.

In other words, the fly by wire accelerator failure could be related to any crossover in function from just about any part of the system!

Do you think Toyota will survive?

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    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Thank you Gypsy Willow, I learn more new things every day about cars and motorcycles, trucks, anything with wheels.

      I have since I was a little tacker, as it interests me greatly. I have a list of recalls for Toyota on my hub "What's wrong with your car"

      In short I would say there are risks, especially if the car has not been returned to the dealer for any available update or modification.

    • Gypsy Willow profile image

      Gypsy Willow 

      8 years ago from Lake Tahoe Nevada USA , Wales UK and Taupo New Zealand

      You certainly know your stuff earnesthub! impressive. My friend has just bought a Toyota Camry abut a year old. Is she putting herself at risk?

    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Hi Lachie, you have taken on a very interesting subject I believe.

      Both Ford and Toyota have very advanced and long established R&D so I imagine they will be looking for market share separately hoping to gain the edge in sales with innovations gleened from the many others in their industry that are fighting to stay in this soon to be diminishing market.

      Toyota has made a huge strategic error in their cost cutting.

      The idea of using the same electronic components across a range of models has put all their eggs in one basket, so I imagine future outsourcing of these electronics will reverse the current trend and increase in cost as quality assurance will mean better component quality required to ensure long term stability of operation with built in self switching power-safes being better integrated.

      Simplification should comes with any real advancement in future car designs, as electronic systems learn not only to self detect problems, but to bypass to "limp home" modes of operation as the safety requirements grow to include ensuring the damn things don't break down completely often in dangerous positions on a busy road and can be safely driven home or to the repairer.

      We should see less stupid over reaching with experimental cars from both Ford and Toyota. Concept cars will not be built pointing to dead end technologies like compressed air cars, battery driven cars which are too heavy, solar powered cars will be seen more as what they are, a useless direction for engine power and more of an adjunct to power more powerful and efficient output sources.

      Manufacturers like Honda and Daewoo have already shown the direction. Smaller motors, better use of space and the capacity to move 4 people or even 5 with less than one litre engine size, and variable horsepower systems in large vehicles including very large trailer trucks and Interstate transporters.

      braking will change to electrical with electronic control for ABS and steering assistance all being controlled from the alternator/generator brakes. No more hydraulic brakes in the future, too complex since ABS and assisted steering.

      The area where both companies may be able to co-operate could be in the ongoing development of suspension where Toyota have access to BMW suspension technology. I know this to be true because of a suspension design I was involved in which they both know about.

      The other area that could be a joint development could be in the area of mechanical/electrical over-rides and dual system electronics to reduce electronic only breakdowns which require towing.

      Currently many quite new low kilometre cars are blowing electronic components worth a lot of money and when replaced they often blow again.

      In some cases the reason has been weak chips and poor design, others a fault in the rest of the electrics in the car has caused the electronic component to get fried.

      This can be very frustrating to find, and replacing the unit will just blow it again unless the source of the short circuit or overload is found. Without the component in place their is no information and it gets difficult for many workshops to locate.

      Issues like these will need a lot of R&D, and if they use the resources they both have well I feel sure they can innovate in this way, not just changing body shapes to fit fashion, and re-working 30 year old designs!

      I hope this little rant helps.

    • profile image


      8 years ago

      Hi Earnest,

      thanks for the interesting read. I'm a uni student currently analysing the supply chain mangement of both Ford and Toyota. I was just wondering if you had any recommendations for what these two companies should do in the future? Any ideas on how they could improve their strategic alliances?


    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Hello Springboard! Thanks for another informed comment. I must agree with you on all the points you raised. I think Ford is worth watching. It is (wisely I believe) divesting itself of brand names that will not contribute to the future direction the industry will be obliged to take, and getting some money for them whereas soon they would be worth nothing to sell anyway! Tata buying Jaguar had me falling off my chair!

    • Springboard profile image


      8 years ago from Wisconsin

      I do think Toyota will survive, but I agree with your analysis that the current future is dicey at best. Toyota has made some serious missteps, not necessarily entirely so in its manufacturing process (problems happen all the time in the auto industry), but rather in its response to the issues at hand. 1) they outrightly denied the claims that the unintended acceleration problems could be linked to the electronic system and 2) they were slow to address the issue and as a result caused a systemic wave of problems that rippled throughout the Toyota brands.

      Toyota will survive as I stated, but I think they will also be a changed company. Competition just got a little tougher for them. And Ford Motor Company is eating the dust of the other American automakers, Americans are slowly beginning to see there is some mistruth to the idea that foreign made cars are better cars, and Toyota is no longer worthy of any "premium" to its price afforded in the calculation as to how many miles per dollar you will get from a Toyota vs. another car.

      It will absolutely be interesting to watch in any event.

    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Thank you for the comment Oliversmum. The saga is ongoing all right. More recalls in the pipeline including some Australian Toyotas.

      The big problem I see is in the cost cutting that has gone on.

      How do they recover while remaining competitive.

      I see Toyota has upped production despite these ongoing recalls!

    • oliversmum profile image


      8 years ago from australia

      Earnestshub. Hi. Oh my goodness, the cat is really out of the bag now. What on earth is Toyota going to do.

      Cutting costs and doing things on the cheap has not brought them any joy.

      Some of the problems sound pretty dangerous,and the repairs will take a long time for most of the car owners, what will they do in the mean time knowing they are driving a car that is not one hundred percent safe.

      Maybe you and Agvulpes are right, the Japanese Government could step in to help if it becomes necessary. This problem is too big and wide spread.

      The loss of jobs plus everything else is just mind boggling.

      This is a great hub, and the information is invaluable.

      Thank you for putting us in the picture :) :)

    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Hi ag, I do hope it works out for Toyota. With more than 300,000 employees in Japan alone, I do hope the Government does help Toyota if they begin to fail.

    • earnestshub profile imageAUTHOR


      8 years ago from Melbourne Australia

      Thank you Ken, you are most welcome.

    • valeriebelew profile image


      8 years ago from Metro Atlanta, GA, USA

      They will survive, though maybe not at the same level of trust and popularity they enjoyed before. American auto makers are still here, but not with a whole lot of respect.

    • nick247 profile image


      8 years ago from United Kingdom

      Really interesting hub, I hadn't thought it through this far. Of course, they may be able to fix the cost-cutting and still stay at the same price depending on how reliant the profit margin was on cost-cutting. They may just have to lower their expectations of per-unit profit...perhaps?

    • agvulpes profile image


      8 years ago from Australia

      earnestshub, it would be a sad day if Toyota were to go under in more ways than one. In answer to your question " Where to now for Toyota " my scenario would be that the Japanese Government could not at this fragile point of the economy let Toyota go under. I feel that the immense unemployment within Toyota and ancillary industries would be a disaster for the Japanese economy.

      Thank you for an informative Hub and I look forward to your updates!

    • Ken R. Abell profile image

      Ken R. Abell 

      8 years ago from ON THE ROAD

      Thanks for the history & information. Quite interesting.


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