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Where Toyota Went Wrong

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I wouldn’t like to be a Toyota dealer right now. Angry and anxious customers will receive letters this week telling them how to deal with the unprecedented recall of millions of vehicles, and it is the dealerships and authorised mechanics around the world who are first in line to face the fallout from consumers.

For the world’s largest car manufacturer, it is a torrid time. But could all of this have been avoided? Leaving aside the design or construction faults that prompted the recall, or the management strategies that may have played a part, I’m not convinced that everything had to play out this way. What is painfully obvious is Toyota’s initial handling of reported problems is what has led to the company’s current crisis.

Toyota have followed every rule in the “How to cause a PR disaster” manual. Initial reports from customers were ignored or brushed off, the company stayed quiet as worries mounted, and only initiated a recall when it was impossible not to do so. Rather than managing the story, Toyota itself became the story and found itself at the centre of a media storm of rumour, hyperbole, and customers in near-panic. Had the company taken a more open and proactive approach to handling the faults in the vehicles that are now being recalled, this would have been a footnote in the motoring pages, rather than the maelstrom that is now dominating the business press.

Customers today expect a greater degree of responsiveness from the companies they deal with, and expect the issues they raise to be addressed and resolved in a timely fashion. Not only that, but it’s impossible to keep something like a design fault under wraps, as customers are no longer isolated, but can interact with each other on the internet, pooling knowledge and building up a clear picture of whether theirs is an individual case or something that is being experienced across the board. Toyota should have known this, and should have acted accordingly.

Instead of admitting that there was a problem, and offering possible solutions, the company instead denied, obfuscated and dragged its feet in coming forward to answer its critics. As most companies have aimed to become more transparent and engaged, it seems incredible that Toyota thought that throwing up the barricades was a good idea. Taking the first customer reports that trickled in seriously would have allowed them to say “We found a fault, we’re working on fixing it, please don’t worry.” Instead, by allowing the issue to have become a media story, the company has now suffered possibly irreparable damage to its reputation.

A reputation takes years to build up, but can be destroyed in seconds. Toyota could have maintained its image as an efficient and reliable vehicle manufacturer had it done things differently. Instead, by downplaying the problems and being perceived as slow to respond to customer complaints, the company is now suffering from a self-inflicted public relations wound from which it may never recover.

[Image by Kenjonbro]


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