Repairing Toyota's tarnished image
08-05-2006, 04:08 PM
#1
Suzuka Master
Thread Starter
Repairing Toyota's tarnished image
August 5, 2006
Repairing Some Dents in an Image
By MICHELINE MAYNARD and MARTIN FACKLER
The news is something no car owner wants to hear. Power steering on their hard-to-get hybrid could fail. Tires on their small pickups could bulge and possibly burst. Air bags may not inflate during a crash.
These recalls are the type that have long bedeviled American carmakers, but this time it was Toyota of Japan, long known as the crème de la crème in quality.
Just as Toyota appears poised to pass General Motors to become the world’s largest automaker, it has a growing problem with recalls that is sullying its carefully honed image.
In the United States, Toyota’s largest market, the number of vehicles recalled soared to 2.2 million last year. That was double the number of vehicles recalled in 2004, and more than 10 times the 200,000 cars it recalled in 2003, according to the National Highway Traffic Safety Administration.
In Japan, the number of recalled vehicles has jumped 41-fold since 2001, to 1.9 million last year. And because many of the recalls are for vehicles that are more than 10 years old, analysts fear that another wave of bad quality news may be in store.
The situation has alarmed Toyota’s top executives and angered the Japanese government. It ordered Toyota to explain itself, which the company did in a report delivered Thursday, accompanied by the latest in a series of apologies. In it, the company promised to create a new computer database to obtain information more quickly from dealers on repairs and complaints. The police in Japan said three Toyota officials were under criminal investigation on suspicion that they concealed vehicle defects over eight years.
Inside Toyota, the spate of recalls and the criminal investigation has caused a flurry of high-level efforts to diagnose and fix the problems, which have affected its Prius hybrid, the gold standard among fuel-efficient vehicles; the Tacoma pickup; and cars in its Lexus luxury lineup.
Quality problems can befall any company, whether based in Detroit, Europe or elsewhere. This week, in fact, Ford expanded a recall of its vans, sport utility vehicles and pickup trucks because of problems with cruise control systems that were prone to catching fire.
For now, Toyota’s quality issues do not seem to be damping its operations either in Japan, where it is the biggest automaker, or the United States, where Toyota passed Ford in July to rank as the No. 2 company in terms of auto sales. Nor is it affecting Toyota’s net income, which climbed 39.2 percent during the second-quarter, to $3.2 billion, the company said yesterday. [Page C4.]
But executives know they cannot let the situation fester, because it ultimately threatens Toyota’s ability to grow. If they fail to get their arms around the problem, they will have to pull back on the company’s expansion plans, which are set to include more assembly and engine plants for the United States, as well as factories elsewhere.
At Toyota’s annual executive meeting in June, its departing chairman, Hiroshi Okuda; the new chairman, Fujio Cho; and its chief executive, Katsuaki Watanabe, all vowed to managers that the quality issue would be addressed, according to a senior Toyota executive who attended the meeting.
“The quality issue is a big concern. They’re embarrassed about it,” said the executive, who insisted on anonymity because the meeting was private.
“You think about Toyota, and quality is in our DNA,” he continued. “We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?”
Interviews with car owners and dealers show they have some latitude.
Bruce Wachtell, 71, bought a 2006 Prius in March after years of driving a Toyota Tacoma pickup without any problems.
“It’s never seen a dealer,” he said of the truck.
Mr. Wachtell, a retired ship’s radio officer living in Stinson Beach, Calif., began buying foreign cars after growing frustrated with the quality of American-made vehicles. That sentiment is confirmed, he said, whenever he peruses repair records for various brands in Consumer Reports, and he has not lost any confidence in Toyota because of the recent recalls.
“I think recalls are just simply a function of the fact that no design is perfect,” he said.
Mr. Wachtell called his dealership after discovering recall notices that included the 2006 Prius on the Internet, but he was told his vehicle was not among those affected. Both the Tacoma and the Prius, however, are among the vehicles in Toyota’s recent recalls.
At Bredemann Toyota in Park Ridge, Ill., Don Ziemke, the general sales manager, said only a few shoppers had asked about the implications of the recalls. Other dealers said they had prepared their employees to answer such questions, but that no one had even brought up the topic.
“Toyota’s longevity and reliability has always been a strong suit,” Mr. Ziemke said. “That kind of takes a hit when there are recalls out there.”
Still, he said, “It’s against the grain as far as what Toyota has provided its dealer body and customers in the past.”
The primary reason for the recalls is Toyota’s overloaded engineering staff, say company executives and industry analysts.
Despite its global expansion during the 1990’s, it failed to hire enough engineers to keep up with production increases.
And it kept most of its development in Japan, even though it built research and development centers in places like Ann Arbor, Mich., and Brussels. At the same time, a new Japanese law required companies to pay for overtime for white-collar workers, raising the costs incurred by engineers, whose long hours on the job were the stuff of industry legend.
Analysts say that all this may have contributed to a number of errors introduced during vehicle development. There have been fewer problems on the assembly line, however, which has been a more common cause of recent recalls at other carmakers like Nissan.
Another issue is that Toyota, like other global auto companies, has farmed out the development of key components to its suppliers, both companies with which it has been doing business for years, like Denso of Japan, and newer ones, like the Delphi Corporation, the biggest American parts maker.
The damage has been slow to emerge — indeed, most recent recalls involve cars produced in the 1990’s. But that means potential problems from hectic growth years in the early 2000’s have yet to appear, and analysts warn that Toyota’s quality woes may only become worse before they get better.
“I’m more concerned about the future,” said Kunihiko Shiohara, an auto analyst for Goldman Sachs in Tokyo. “A fundamental turnaround in quality levels will take at least four years.”
It also does not help that some rivals appear to be gaining quality ground on Toyota, whose Toyota-brand cars and Lexus line of luxury cars had long topped quality rankings. It still dominated the recommended list from Consumer Reports this year. But in June, a survey of new-vehicle quality by J. D. Power & Associates, a marketing research company, ranked the German luxury carmaker Porsche in the top spot, and with Hyundai of South Korea in second place, ahead of Toyota at No. 3.
To be sure, rising recall numbers are not limited to Toyota. A reason that recalls have gone up is that automakers are using an increasing number of common parts across a number of car models, which saves money, but also means that flaws affect larger numbers of vehicles.
Another is the increasing complexity of vehicles, as companies rely more heavily on electronics and computerized features that used to be mechanical. “It’s not fair to single out Toyota for many problems,” said Takaki Nakanishi, an auto industry analyst with J. P. Morgan in Tokyo.
Still, the rapid rise in recalls at Toyota stands out in comparison with other carmakers. In Japan, where Toyota is the largest auto company, with about 39 percent of the market, its recalls quadrupled over the last four years, to 1.9 million in 2005. That compares with 199,000 at No. 2 Nissan and 205,000 at Honda in 2005, according to the transportation ministry.
In Toyota’s case, 68 percent of its recent recalls can be blamed on design flaws, according to Goldman Sachs. They include rubber parts not made thick enough to withstand engine heat and joints too weak to hold together. Of Toyota’s recalls in 2004, 68 percent were because of design problems, Goldman Sachs said.
Analysts say Toyota’s problems stem from the mid-1990’s, when Mr. Okuda, who was president, began expanding its global production. Toyota did not hire enough engineers to keep up with production increases because it was trying to meet tough self-imposed cost-cutting targets, analysts said.
Understaffed design centers have also forced Toyota to rely on large parts makers to help design major components “Toyota’s resources have been stretched quite a bit by the big increases in volume,” said Andrew Phillips, an analyst at Nikko Citigroup in Tokyo. “What’s remarkable is that most the recalls now predate the really big ramp-up.”
That came after 2000, when Toyota’s annual vehicle sales rose to the almost 8.85 million expected this year, from about 6 million.
But Toyota has increased the hiring of new engineers, bringing on 979 last year, compared with 310 in 2001. A company spokesman, Paul Nolasco, said Toyota planned to hire at least another 850 this year.
In a departure from corporate tradition that stressed spending a career at a single company, Toyota wants 200 of its new hires to be experienced engineers hired in midcareer from elsewhere.
In June, Toyota assigned a second executive vice president to its quality control division and created a new senior managing director spot dedicated to improving quality.
“Everyone is taking this very seriously,” said a top-ranking executive in Toyota’s North American operations who spoke only on condition of anonymity because of the sensitivity of the situation. The stakes are high, he added: “If we can’t lick it, we will have to slow down” — a decision Toyota hopes it does not have to make.
Nick Bunkley contributed reporting for this article.
http://www.nytimes.com/2006/08/05/bu...e2a887&ei=5070
Repairing Some Dents in an Image
By MICHELINE MAYNARD and MARTIN FACKLER
The news is something no car owner wants to hear. Power steering on their hard-to-get hybrid could fail. Tires on their small pickups could bulge and possibly burst. Air bags may not inflate during a crash.
These recalls are the type that have long bedeviled American carmakers, but this time it was Toyota of Japan, long known as the crème de la crème in quality.
Just as Toyota appears poised to pass General Motors to become the world’s largest automaker, it has a growing problem with recalls that is sullying its carefully honed image.
In the United States, Toyota’s largest market, the number of vehicles recalled soared to 2.2 million last year. That was double the number of vehicles recalled in 2004, and more than 10 times the 200,000 cars it recalled in 2003, according to the National Highway Traffic Safety Administration.
In Japan, the number of recalled vehicles has jumped 41-fold since 2001, to 1.9 million last year. And because many of the recalls are for vehicles that are more than 10 years old, analysts fear that another wave of bad quality news may be in store.
The situation has alarmed Toyota’s top executives and angered the Japanese government. It ordered Toyota to explain itself, which the company did in a report delivered Thursday, accompanied by the latest in a series of apologies. In it, the company promised to create a new computer database to obtain information more quickly from dealers on repairs and complaints. The police in Japan said three Toyota officials were under criminal investigation on suspicion that they concealed vehicle defects over eight years.
Inside Toyota, the spate of recalls and the criminal investigation has caused a flurry of high-level efforts to diagnose and fix the problems, which have affected its Prius hybrid, the gold standard among fuel-efficient vehicles; the Tacoma pickup; and cars in its Lexus luxury lineup.
Quality problems can befall any company, whether based in Detroit, Europe or elsewhere. This week, in fact, Ford expanded a recall of its vans, sport utility vehicles and pickup trucks because of problems with cruise control systems that were prone to catching fire.
For now, Toyota’s quality issues do not seem to be damping its operations either in Japan, where it is the biggest automaker, or the United States, where Toyota passed Ford in July to rank as the No. 2 company in terms of auto sales. Nor is it affecting Toyota’s net income, which climbed 39.2 percent during the second-quarter, to $3.2 billion, the company said yesterday. [Page C4.]
But executives know they cannot let the situation fester, because it ultimately threatens Toyota’s ability to grow. If they fail to get their arms around the problem, they will have to pull back on the company’s expansion plans, which are set to include more assembly and engine plants for the United States, as well as factories elsewhere.
At Toyota’s annual executive meeting in June, its departing chairman, Hiroshi Okuda; the new chairman, Fujio Cho; and its chief executive, Katsuaki Watanabe, all vowed to managers that the quality issue would be addressed, according to a senior Toyota executive who attended the meeting.
“The quality issue is a big concern. They’re embarrassed about it,” said the executive, who insisted on anonymity because the meeting was private.
“You think about Toyota, and quality is in our DNA,” he continued. “We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?”
Interviews with car owners and dealers show they have some latitude.
Bruce Wachtell, 71, bought a 2006 Prius in March after years of driving a Toyota Tacoma pickup without any problems.
“It’s never seen a dealer,” he said of the truck.
Mr. Wachtell, a retired ship’s radio officer living in Stinson Beach, Calif., began buying foreign cars after growing frustrated with the quality of American-made vehicles. That sentiment is confirmed, he said, whenever he peruses repair records for various brands in Consumer Reports, and he has not lost any confidence in Toyota because of the recent recalls.
“I think recalls are just simply a function of the fact that no design is perfect,” he said.
Mr. Wachtell called his dealership after discovering recall notices that included the 2006 Prius on the Internet, but he was told his vehicle was not among those affected. Both the Tacoma and the Prius, however, are among the vehicles in Toyota’s recent recalls.
At Bredemann Toyota in Park Ridge, Ill., Don Ziemke, the general sales manager, said only a few shoppers had asked about the implications of the recalls. Other dealers said they had prepared their employees to answer such questions, but that no one had even brought up the topic.
“Toyota’s longevity and reliability has always been a strong suit,” Mr. Ziemke said. “That kind of takes a hit when there are recalls out there.”
Still, he said, “It’s against the grain as far as what Toyota has provided its dealer body and customers in the past.”
The primary reason for the recalls is Toyota’s overloaded engineering staff, say company executives and industry analysts.
Despite its global expansion during the 1990’s, it failed to hire enough engineers to keep up with production increases.
And it kept most of its development in Japan, even though it built research and development centers in places like Ann Arbor, Mich., and Brussels. At the same time, a new Japanese law required companies to pay for overtime for white-collar workers, raising the costs incurred by engineers, whose long hours on the job were the stuff of industry legend.
Analysts say that all this may have contributed to a number of errors introduced during vehicle development. There have been fewer problems on the assembly line, however, which has been a more common cause of recent recalls at other carmakers like Nissan.
Another issue is that Toyota, like other global auto companies, has farmed out the development of key components to its suppliers, both companies with which it has been doing business for years, like Denso of Japan, and newer ones, like the Delphi Corporation, the biggest American parts maker.
The damage has been slow to emerge — indeed, most recent recalls involve cars produced in the 1990’s. But that means potential problems from hectic growth years in the early 2000’s have yet to appear, and analysts warn that Toyota’s quality woes may only become worse before they get better.
“I’m more concerned about the future,” said Kunihiko Shiohara, an auto analyst for Goldman Sachs in Tokyo. “A fundamental turnaround in quality levels will take at least four years.”
It also does not help that some rivals appear to be gaining quality ground on Toyota, whose Toyota-brand cars and Lexus line of luxury cars had long topped quality rankings. It still dominated the recommended list from Consumer Reports this year. But in June, a survey of new-vehicle quality by J. D. Power & Associates, a marketing research company, ranked the German luxury carmaker Porsche in the top spot, and with Hyundai of South Korea in second place, ahead of Toyota at No. 3.
To be sure, rising recall numbers are not limited to Toyota. A reason that recalls have gone up is that automakers are using an increasing number of common parts across a number of car models, which saves money, but also means that flaws affect larger numbers of vehicles.
Another is the increasing complexity of vehicles, as companies rely more heavily on electronics and computerized features that used to be mechanical. “It’s not fair to single out Toyota for many problems,” said Takaki Nakanishi, an auto industry analyst with J. P. Morgan in Tokyo.
Still, the rapid rise in recalls at Toyota stands out in comparison with other carmakers. In Japan, where Toyota is the largest auto company, with about 39 percent of the market, its recalls quadrupled over the last four years, to 1.9 million in 2005. That compares with 199,000 at No. 2 Nissan and 205,000 at Honda in 2005, according to the transportation ministry.
In Toyota’s case, 68 percent of its recent recalls can be blamed on design flaws, according to Goldman Sachs. They include rubber parts not made thick enough to withstand engine heat and joints too weak to hold together. Of Toyota’s recalls in 2004, 68 percent were because of design problems, Goldman Sachs said.
Analysts say Toyota’s problems stem from the mid-1990’s, when Mr. Okuda, who was president, began expanding its global production. Toyota did not hire enough engineers to keep up with production increases because it was trying to meet tough self-imposed cost-cutting targets, analysts said.
Understaffed design centers have also forced Toyota to rely on large parts makers to help design major components “Toyota’s resources have been stretched quite a bit by the big increases in volume,” said Andrew Phillips, an analyst at Nikko Citigroup in Tokyo. “What’s remarkable is that most the recalls now predate the really big ramp-up.”
That came after 2000, when Toyota’s annual vehicle sales rose to the almost 8.85 million expected this year, from about 6 million.
But Toyota has increased the hiring of new engineers, bringing on 979 last year, compared with 310 in 2001. A company spokesman, Paul Nolasco, said Toyota planned to hire at least another 850 this year.
In a departure from corporate tradition that stressed spending a career at a single company, Toyota wants 200 of its new hires to be experienced engineers hired in midcareer from elsewhere.
In June, Toyota assigned a second executive vice president to its quality control division and created a new senior managing director spot dedicated to improving quality.
“Everyone is taking this very seriously,” said a top-ranking executive in Toyota’s North American operations who spoke only on condition of anonymity because of the sensitivity of the situation. The stakes are high, he added: “If we can’t lick it, we will have to slow down” — a decision Toyota hopes it does not have to make.
Nick Bunkley contributed reporting for this article.
http://www.nytimes.com/2006/08/05/bu...e2a887&ei=5070
08-06-2006, 04:37 PM
#3
Senior Moderator
why the hell would u want that?
08-06-2006, 04:58 PM
#4
6G TLX-S
No surprise. This is bound to happen to any auto company that is expanding too quick, and with a hugh range of models to manage.
08-06-2006, 05:23 PM
#5
Suzuka Master
Thread Starter
Originally Posted by Edward'TLS
No surprise. This is bound to happen to any auto company that is expanding too quick, and with a hugh range of models to manage.
08-06-2006, 11:33 PM
#7
6G TLX-S
Originally Posted by SpeedyV6
it isn't happening to Hyundai
Toyota = 16
Lexus = 8
Scion = 3
----------------
Total = 27
Hyundai = 8
Kia = 9
----------------
Total = 17
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08-07-2006, 08:13 AM
#8
Burning Brakes
Join Date: Aug 2003
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Originally Posted by csmeance
why the hell would u want that?
wouldnt hurt for honda to fess up to recall worthy issues as well instead of continual denial
08-26-2006, 03:40 PM
#9
Suzuka Master
Thread Starter
Toyota May Delay New Models
To Address Rising Quality Issues
By NORIHIKO SHIROUZU
August 25, 2006; Page A1
Toyota Motor Corp., jarred by a surge of recalls and quality problems, is considering tapping the brakes on its ambitious growth plans, delaying introductions of some new models by as much as half a year, people familiar with the matter say.
Toyota has been accelerating its growth world-wide and moving to overtake General Motors Corp. as the world's No. 1 auto maker. In May, the company said capital expenditures in the current fiscal year would reach a record of roughly $14 billion. But the fast-paced expansion has come with a cost: an increasing number of quality problems in North America, Japan and elsewhere that threaten to dent its quality image.
According to senior executives and engineers familiar with the move, the company is considering adding as much as three to six more months to projects that normally call for roughly two to three years of development lead time, in order to stem the growing tide of quality problems. Those individuals say that while some programs would be spared, delays likely would affect a relatively wide range of projects. Among the high-volume models that could be affected are the next Sienna minivan, Solara sports coupe and Avalon sedan.
Toyota's chief spokesman, Shigeru Hayakawa, declined to comment, saying product-development lead times and the specific timing of product launches are "competitive" information. "It's our basic stance that we introduce products in a timely manner while meeting changing needs of the market," he said. "That general direction remains unchanged."
Toyota's rethinking of its fast-paced new-model strategy comes as the Japanese auto giant's sales around the world, and in the U.S., are increasing rapidly. So is the number of Toyota vehicles being recalled for quality problems.
Last year in the U.S. -- its largest market by volume -- Toyota recalled 2.38 million vehicles, according to the National Highway Traffic Safety Administration. That's more than the 2.26 million it sold. Overall, the company sold nearly eight million vehicles world-wide.
This year, the company has recalled 628,000 vehicles in the U.S., and people familiar with the matter say it may soon recall an additional half-million vehicles. The latest recall would affect the current generation of the Sienna minivan, because of concern that poorly designed locking devices for rear seats may fail to securely anchor them to the vehicle floor.
Recalls also are on the rise in Japan, Toyota's second-largest market, where police and prosecutors are investigating possible professional negligence for shirking recalls for eight years. Investigators are looking at whether a suspected faulty steering part on the Hilux Surf recreational vehicle may have caused an August 2004 head-on crash that injured five people. The Japanese government has reprimanded the company and called for improved recall practices in the wake of the police probe.
For the most part, Toyota's recalls have involved relatively minor issues and nearly all have been voluntary actions by the company, not the kind in which consumer complaints prod the government into action, says manufacturing guru James Womack, chairman of the Lean Enterprise Institute in Cambridge, Mass.
Many analysts say the recent rise in recalls may not cause consumers to avoid Toyota cars at all. Despite the rise in recalls, third-party quality surveys by J.D. Power & Associates and Consumer Reports continue to rank Toyota high in initial and medium-term vehicle quality and reliability.
Still, Toyota has painstakingly built a reputation for superior quality over the past three decades, and the soaring number of recalls has been highly embarrassing for its management. At a news conference last month, Toyota President Katsuaki Watanabe offered an elaborate apology.
"I take this seriously and see it as a crisis," Mr. Watanabe said. He then bowed deeply in front of the cameras, adding, "I want to apologize deeply for the troubles we have caused."
Though not final, a move to slow product cycles would mark a step back from an aggressive strategy for global expansion set in motion in the mid-1990s by then-President Hiroshi Okuda.
The strategy called for engineers to pump out more vehicles to fuel the company's growth around the world. Product-development bosses kept engineers on tight launch schedules. Toyota also began relying more heavily on computer-aided design tools to radically compress vehicle-development times by skipping steps such as making physical prototypes to test components.
Using these high-tech tools, Toyota cut new-model development time to as short as about two years -- compared with three or four years in the past. According to officials at the Toyota product-development and engineering center in Ann Arbor, Mich., virtual-engineering tools have helped the company slash the number of prototypes it builds per project to fewer than 20 from 60.
But the new approach, which allowed its main advocate Yoshio Shirai, a senior managing director, to gain a seat on Toyota's board, is now suspected of contributing to the recent rash of embarrassing quality glitches.
Additionally, Toyota executives and engineers say, some mistakes are happening because computer-aided engineering tools have limitations that allow potential design flaws to slip through. Others point to increased use of parts designed by outside suppliers like Delphi Corp. that aren't part of the traditional circle of Toyota partners in Japan.
A slowdown would follow a set of actions announced by the company after the Japanese government's reprimand of its recall policies. In a report submitted to the government, Toyota said it would upgrade a new data network for sharing technical information and product-quality reports from customers in order to handle recalls more efficiently. It also will increase staff at its quality-control headquarters.
Earlier this year, Mr. Watanabe named two executive vice presidents -- including Akio Toyoda, a scion of the auto conglomerate's founding family -- as quality chiefs to oversee various initiatives for building more quality into components and vehicle design.
Inside the company, spending more time doing quality-assurance tests on new and redesigned cars under development is seen as vital to in regaining control of quality, say individuals close to the matter.
By delaying introductions of some products, Toyota would conduct more quality checks on components and, in some cases, create more prototypes to make sure thousands of parts and systems that comprise a typical car work as intended and verify their durability, these people say.
Toyota also is accelerating an application of what it describes as "preventive engineering" -- an approach the auto maker has been implementing since the late 1990s to forecast problem areas based on engineering knowledge accumulated over the years and using extra caution in designing those areas.
The approach is based on the idea that most components of today's cars are proven technologies, and that most problems occur when, for example, engineers combine two or more parts to create a component system. Toyota engineers focus most of their attention on those "interface" areas to predict problems that might develop.
Toyota executives and engineers say one factor behind the rise in recalls is the company's recent strategy to use the same components in a wider range of vehicles to save costs. Often when a component is found defective, it is found on not just one or two models but several products sold across the globe -- a factor that explains in part why the number of vehicles affected by a recall often is well more than half a million.
Toyota also has made what one engineer describes as a "clear and conscious change" in the way it handles recalls in the wake of a painful scandal involving an alleged coverup of vehicle defects by Japan's Mitsubishi Motors Corp. a few years ago, which crippled sales and drove Mitsubishi to the brink of collapse.
"We used to do quiet recalls called 'service campaigns' to deal with many defects, but we're not going to hide anything any more," said one senior engineer. "Most of the known defects and issues are now handled through recalls."
Still, the fast pace of new-model launches -- and pressure to keep product launches on schedule -- has given rise to what another senior engineer calls "bonehead" mistakes.
In Japan this year, for instance, Toyota discovered it had made the rear axle of one sport-utility vehicle with the material used for another SUV. Designs for the two rear axles are almost identical, but the metal materials used to produce them are different enough that mixing the parts up caused concern over the strength of the axle. A Toyota spokesman said there was a question of the strength of the axle but declined to elaborate.
Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com3
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To Address Rising Quality Issues
By NORIHIKO SHIROUZU
August 25, 2006; Page A1
Toyota Motor Corp., jarred by a surge of recalls and quality problems, is considering tapping the brakes on its ambitious growth plans, delaying introductions of some new models by as much as half a year, people familiar with the matter say.
Toyota has been accelerating its growth world-wide and moving to overtake General Motors Corp. as the world's No. 1 auto maker. In May, the company said capital expenditures in the current fiscal year would reach a record of roughly $14 billion. But the fast-paced expansion has come with a cost: an increasing number of quality problems in North America, Japan and elsewhere that threaten to dent its quality image.
According to senior executives and engineers familiar with the move, the company is considering adding as much as three to six more months to projects that normally call for roughly two to three years of development lead time, in order to stem the growing tide of quality problems. Those individuals say that while some programs would be spared, delays likely would affect a relatively wide range of projects. Among the high-volume models that could be affected are the next Sienna minivan, Solara sports coupe and Avalon sedan.
Toyota's chief spokesman, Shigeru Hayakawa, declined to comment, saying product-development lead times and the specific timing of product launches are "competitive" information. "It's our basic stance that we introduce products in a timely manner while meeting changing needs of the market," he said. "That general direction remains unchanged."
Toyota's rethinking of its fast-paced new-model strategy comes as the Japanese auto giant's sales around the world, and in the U.S., are increasing rapidly. So is the number of Toyota vehicles being recalled for quality problems.
Last year in the U.S. -- its largest market by volume -- Toyota recalled 2.38 million vehicles, according to the National Highway Traffic Safety Administration. That's more than the 2.26 million it sold. Overall, the company sold nearly eight million vehicles world-wide.
This year, the company has recalled 628,000 vehicles in the U.S., and people familiar with the matter say it may soon recall an additional half-million vehicles. The latest recall would affect the current generation of the Sienna minivan, because of concern that poorly designed locking devices for rear seats may fail to securely anchor them to the vehicle floor.
Recalls also are on the rise in Japan, Toyota's second-largest market, where police and prosecutors are investigating possible professional negligence for shirking recalls for eight years. Investigators are looking at whether a suspected faulty steering part on the Hilux Surf recreational vehicle may have caused an August 2004 head-on crash that injured five people. The Japanese government has reprimanded the company and called for improved recall practices in the wake of the police probe.
For the most part, Toyota's recalls have involved relatively minor issues and nearly all have been voluntary actions by the company, not the kind in which consumer complaints prod the government into action, says manufacturing guru James Womack, chairman of the Lean Enterprise Institute in Cambridge, Mass.
Many analysts say the recent rise in recalls may not cause consumers to avoid Toyota cars at all. Despite the rise in recalls, third-party quality surveys by J.D. Power & Associates and Consumer Reports continue to rank Toyota high in initial and medium-term vehicle quality and reliability.
Still, Toyota has painstakingly built a reputation for superior quality over the past three decades, and the soaring number of recalls has been highly embarrassing for its management. At a news conference last month, Toyota President Katsuaki Watanabe offered an elaborate apology.
"I take this seriously and see it as a crisis," Mr. Watanabe said. He then bowed deeply in front of the cameras, adding, "I want to apologize deeply for the troubles we have caused."
Though not final, a move to slow product cycles would mark a step back from an aggressive strategy for global expansion set in motion in the mid-1990s by then-President Hiroshi Okuda.
The strategy called for engineers to pump out more vehicles to fuel the company's growth around the world. Product-development bosses kept engineers on tight launch schedules. Toyota also began relying more heavily on computer-aided design tools to radically compress vehicle-development times by skipping steps such as making physical prototypes to test components.
Using these high-tech tools, Toyota cut new-model development time to as short as about two years -- compared with three or four years in the past. According to officials at the Toyota product-development and engineering center in Ann Arbor, Mich., virtual-engineering tools have helped the company slash the number of prototypes it builds per project to fewer than 20 from 60.
But the new approach, which allowed its main advocate Yoshio Shirai, a senior managing director, to gain a seat on Toyota's board, is now suspected of contributing to the recent rash of embarrassing quality glitches.
Additionally, Toyota executives and engineers say, some mistakes are happening because computer-aided engineering tools have limitations that allow potential design flaws to slip through. Others point to increased use of parts designed by outside suppliers like Delphi Corp. that aren't part of the traditional circle of Toyota partners in Japan.
A slowdown would follow a set of actions announced by the company after the Japanese government's reprimand of its recall policies. In a report submitted to the government, Toyota said it would upgrade a new data network for sharing technical information and product-quality reports from customers in order to handle recalls more efficiently. It also will increase staff at its quality-control headquarters.
Earlier this year, Mr. Watanabe named two executive vice presidents -- including Akio Toyoda, a scion of the auto conglomerate's founding family -- as quality chiefs to oversee various initiatives for building more quality into components and vehicle design.
Inside the company, spending more time doing quality-assurance tests on new and redesigned cars under development is seen as vital to in regaining control of quality, say individuals close to the matter.
By delaying introductions of some products, Toyota would conduct more quality checks on components and, in some cases, create more prototypes to make sure thousands of parts and systems that comprise a typical car work as intended and verify their durability, these people say.
Toyota also is accelerating an application of what it describes as "preventive engineering" -- an approach the auto maker has been implementing since the late 1990s to forecast problem areas based on engineering knowledge accumulated over the years and using extra caution in designing those areas.
The approach is based on the idea that most components of today's cars are proven technologies, and that most problems occur when, for example, engineers combine two or more parts to create a component system. Toyota engineers focus most of their attention on those "interface" areas to predict problems that might develop.
Toyota executives and engineers say one factor behind the rise in recalls is the company's recent strategy to use the same components in a wider range of vehicles to save costs. Often when a component is found defective, it is found on not just one or two models but several products sold across the globe -- a factor that explains in part why the number of vehicles affected by a recall often is well more than half a million.
Toyota also has made what one engineer describes as a "clear and conscious change" in the way it handles recalls in the wake of a painful scandal involving an alleged coverup of vehicle defects by Japan's Mitsubishi Motors Corp. a few years ago, which crippled sales and drove Mitsubishi to the brink of collapse.
"We used to do quiet recalls called 'service campaigns' to deal with many defects, but we're not going to hide anything any more," said one senior engineer. "Most of the known defects and issues are now handled through recalls."
Still, the fast pace of new-model launches -- and pressure to keep product launches on schedule -- has given rise to what another senior engineer calls "bonehead" mistakes.
In Japan this year, for instance, Toyota discovered it had made the rear axle of one sport-utility vehicle with the material used for another SUV. Designs for the two rear axles are almost identical, but the metal materials used to produce them are different enough that mixing the parts up caused concern over the strength of the axle. A Toyota spokesman said there was a question of the strength of the axle but declined to elaborate.
Write to Norihiko Shirouzu at norihiko.shirouzu@wsj.com3
URL for this article:
http://online.wsj.com/article/SB115644337137844667.html
Hyperlinks in this Article:
(1) http://online.wsj.com/public/page/0,...=ARTICLE_VIDEO
(2) http://online.wsj.com/public/page/0,...=ARTICLE_VIDEO
(3) mailto:norihiko.shirouzu@wsj.com
08-26-2006, 04:51 PM
#10
Moderator Alumnus
eh, Toyota has the balls to recall cars, and they had one bad year. More than I can say for any other manufacturer.
And it's asshats who write articles like the ones posted that cause companies to NOT handle recalls properly. Toyota made some mistakes, they even PUBLICALLY announced them. That's proper... I can name MANY Ford, GM, Honda problems that should have been recalls but they couldn't handle the heat from the problems.
Ford, Honda, GM wait until the NTSB gets involved before they recall things.
gee lets base quality on the # of recalls a manufacturer has, and what do the other main three do (ford, GM honda).... gee they don't recall anything until they are forced too... making the honest company look bad.
America READ BETWEEN THE LINES
We used to do quiet recalls called 'service campaigns' to deal with many defects, but we're not going to hide anything any more," said one senior engineer. "Most of the known defects and issues are now handled through recalls."
Ford, Honda, GM wait until the NTSB gets involved before they recall things.
gee lets base quality on the # of recalls a manufacturer has, and what do the other main three do (ford, GM honda).... gee they don't recall anything until they are forced too... making the honest company look bad.
America READ BETWEEN THE LINES
08-26-2006, 09:54 PM
#11
I'm not so sure it has anything to do with honesty...remember the Toyota sludge fiasco? More of a different approach to PR. It's a very risky move to be admitting faults...you can either be seen positively or negatively. Toyota's in a situation where it's big enough to afford such a risky move.
08-26-2006, 10:44 PM
#12
Senior Moderator
I think the classic case of 'honesty' would be Tylenol of the 1980s. I think every person who takes marketing uses that case and how MacNeil was up front with the American public and what they did to rectify the situation (re: tamper-proof bottling) ... automotive companies need to look within to prevent a P/R nightmare from happening.
I think the rash of recalls from Toyota is a wake-up call for their engineering dept and board of directors. It appears that having a press conference apologizing to the public with their current rise in recalls as a way to mitigate any image tarnishing. Certainly, I don't believe this is another Mitsubishi fiasco out of this ...
I think the rash of recalls from Toyota is a wake-up call for their engineering dept and board of directors. It appears that having a press conference apologizing to the public with their current rise in recalls as a way to mitigate any image tarnishing. Certainly, I don't believe this is another Mitsubishi fiasco out of this ...
08-27-2006, 09:52 AM
#13
Moderator Alumnus
Originally Posted by phile
I'm not so sure it has anything to do with honesty...remember the Toyota sludge fiasco? More of a different approach to PR. It's a very risky move to be admitting faults...you can either be seen positively or negatively. Toyota's in a situation where it's big enough to afford such a risky move.
fiasco?
Toyota is under a microscope since they're on top. Some of the US media is jumping all over anything they can. It's pretty lame if you ask me, the question is are they hired by a US company to report this? hmmm.... US media should concentrate on recalls that SHOULD have happened with other companies but never did and see how the tables turn.
It's a risky move to admit fault because the US media feeds on negative news. This is why companies hide information from the public, and that's just lame...
So it's a risky move to be honest and proactive eh? vs. disceptive and reactive like the majority of the Auto manufacturers....
I'll choose "honest and proactive" thanks.
08-27-2006, 03:19 PM
#14
Originally Posted by SiGGy
It's a risky move to admit fault because the US media feeds on negative news. This is why companies hide information from the public, and that's just lame...
So it's a risky move to be honest and proactive eh? vs. disceptive and reactive like the majority of the Auto manufacturers....
I'll choose "honest and proactive" thanks.
So it's a risky move to be honest and proactive eh? vs. disceptive and reactive like the majority of the Auto manufacturers....
I'll choose "honest and proactive" thanks.
08-28-2006, 10:19 AM
#15
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Who's being proactive?? They are being sued for airbags not going off, trannys blowing up in the 07 Camry etc. You can be an apoligist all you want but the fact remains that since Toyota has made an all out run at the title of "Largest automaker" and started building rental rockets( I could rent the new Rav before you could buy one) ther quality has suffered ten fold. All it takes now is one 20/20, primetime story for it to be really bad.
08-28-2006, 10:55 AM
#16
Moderator Alumnus
Originally Posted by Stevens24
Who's being proactive?? They are being sued for airbags not going off, trannys blowing up in the 07 Camry etc. You can be an apoligist all you want but the fact remains that since Toyota has made an all out run at the title of "Largest automaker" and started building rental rockets( I could rent the new Rav before you could buy one) ther quality has suffered ten fold. All it takes now is one 20/20, primetime story for it to be really bad.
Do you work for the UAW?
Tranny blowing up?
Get your facts straight before you put your DRAMATIC post. in. They had some failures, the transmission DID NOT BLOW UP. Go back to watching your soaps.They RECALLED the Toyota transmissions less than 1 month after the 1st failure. They handled the situation PRO ACTIVELY, an example of someone blowing off the issue is Honda with the CL, TL, Oddesy, Accord. I could name a few others who have done the same thing recently. They ignored the problem for almost 2-3 years like Honda!
And umm Honda and Dodge got sued as well. We live in America, I can sue you for writing a retarded post if I want.
Wake up! 1 month on a fix is being proactive.
Some of you are just on the hate bandwagon. I don't even own a Toyota, but I'm not being as ignorant to the REAL facts as some of you. A lot of you are jumping on anything you can find to promote your own belief that Toyota sucks.
Engineering problems happen, a good company fixes them and doesn't turn their head away... Hence the fast recalls after the problem has been addressed.
To focus on the few minor faults Toyota has had (And they stood behind their mistakes I might add) and then to ignore ALL of the issues Ford, Honda & GM have had recently that they ignored is just ludacris... Toyota is on top because they belong there...
So if Toyota pulled a GM, Ford or Honda and didn't announce these recalls and just did them as a TSB, you wouldn't have anything to talk about now would you...
08-28-2006, 11:56 AM
#17
It's not an issue "hate" as you put it. Looking at it from a business standpoint, Toyota is using this ploy to improve their corporate image - that's all. And it apparently is working since you clearly see Toyota as being "honest" and what not, when in fact, even if they weren't honest, the NHTSA would've recalled their cars if significant problems should develop anyway. That's why the NHTSA is there, to prevent automakers from doing all these nebulous things you apparently feel they're doing, except for Toyota, of course.
I just find it amazing you seem to put them in such high regards with how they handle recalls when it's quite obvious Toyota is a huge company that's extremely efficient - their economy of scale allows them to solve problems rather quickly. That doesn't make other automakers less honest.
And if you want to talk about proactive, Honda is starting to put standard airbags and safety measures on every single vehicle regardless of price. They have a safety testing facility the size of a football field that not only tests how cars fare in crash, but also how pedestrians would survive being hit by a car. To me, that's proactive - they're building safe cars from the factory and they're willing to lose some money by offering safety items that would otherwise be optional or not even available from other automakers should you not be able to afford one of their top models.
I just find it amazing you seem to put them in such high regards with how they handle recalls when it's quite obvious Toyota is a huge company that's extremely efficient - their economy of scale allows them to solve problems rather quickly. That doesn't make other automakers less honest.
And if you want to talk about proactive, Honda is starting to put standard airbags and safety measures on every single vehicle regardless of price. They have a safety testing facility the size of a football field that not only tests how cars fare in crash, but also how pedestrians would survive being hit by a car. To me, that's proactive - they're building safe cars from the factory and they're willing to lose some money by offering safety items that would otherwise be optional or not even available from other automakers should you not be able to afford one of their top models.
08-28-2006, 01:30 PM
#18
Moderator Alumnus
Originally Posted by phile
It's not an issue "hate" as you put it. Looking at it from a business standpoint, Toyota is using this ploy to improve their corporate image - that's all. And it apparently is working since you clearly see Toyota as being "honest" and what not, when in fact, even if they weren't honest, the NHTSA would've recalled their cars if significant problems should develop anyway. That's why the NHTSA is there, to prevent automakers from doing all these nebulous things you apparently feel they're doing, except for Toyota, of course.
I just find it amazing you seem to put them in such high regards with how they handle recalls when it's quite obvious Toyota is a huge company that's extremely efficient - their economy of scale allows them to solve problems rather quickly. That doesn't make other automakers less honest.
And if you want to talk about proactive, Honda is starting to put standard airbags and safety measures on every single vehicle regardless of price. They have a safety testing facility the size of a football field that not only tests how cars fare in crash, but also how pedestrians would survive being hit by a car. To me, that's proactive - they're building safe cars from the factory and they're willing to lose some money by offering safety items that would otherwise be optional or not even available from other automakers should you not be able to afford one of their top models.
I just find it amazing you seem to put them in such high regards with how they handle recalls when it's quite obvious Toyota is a huge company that's extremely efficient - their economy of scale allows them to solve problems rather quickly. That doesn't make other automakers less honest.
And if you want to talk about proactive, Honda is starting to put standard airbags and safety measures on every single vehicle regardless of price. They have a safety testing facility the size of a football field that not only tests how cars fare in crash, but also how pedestrians would survive being hit by a car. To me, that's proactive - they're building safe cars from the factory and they're willing to lose some money by offering safety items that would otherwise be optional or not even available from other automakers should you not be able to afford one of their top models.
If you had been paying attention to Toyota for say longer than these recent news articles you'd realize they have had this kind of work ethic for YEARS now. This isn't the 1st set of recalls they've done. This is the 1st set you have paid attention too because the media hyped it...
So when Honda and Dodge ignored their transmissions issues it was because they are a small company? Do you really believe the stuff you are saying? Your statements contradict one another...
I just find it amazing you seem to put them in such high regards with how they handle recalls when it's quite obvious Toyota is a huge company that's extremely efficient - their economy of scale allows them to solve problems rather quickly. That doesn't make other automakers less honest.
YES, Honda Ford and Dodge are just as equipped to state they had a defect in their transmissions design. Ignoring it until the NTSB forces them to fix it is not the right way to handle things.
You even said they are fully equipped right here...
And if you want to talk about proactive, Honda is starting to put standard airbags and safety measures on every single vehicle regardless of price. They have a safety testing facility the size of a football field that not only tests how cars fare in crash, but also how pedestrians would survive being hit by a car.
Recalls are not necessarily a bad thing, while it does show there was a flaw in the design. It's not a tell tale case of a poor product. I'd much rather own a vehicle from a company who acknowledges a problem and provides a fix in a timely manner vs. one who waits until they are forced too. How many Honda/Dodge owners went through 4+ transmissions over 3 years before they received a "fix" for an issue that supposedly didn't exist. And they did it quietly in a TSB, Dodge didn't even fix the issue... they made the newer trucks with a redesigned transmission. Leaving anyone with that model year truck hosed. Educated people who are aware of the issues will stay clear of those years when looking for a used vehicle.
So YES, that makes other automakers less honest. They didn't want to take the bad publicity. Plain and simple, why? because people like you would be saying the same things against Honda right now. Your brainwashed by the media IMO. Or, better yet, I bet you haven't experienced a major issue that got ignored or stuck under the table. I'm sure you'll whistle a different tune if you ever do.
Toyota didn't make it to the top by using misdirection.
It takes a man to stand up and say he made a mistake, a boy would cowardly wait until someone else noticed it.
Don't misunderstand me, they have made some big mistakes. But they are owning up to it. Now the ball is in their court to fix them in the long run. They have had one bad year out of how many good ones? It's premature to drop the gauntlet on them, I don't understand why some of you are so quick to do it...
This basically reiterates what I was saying...
p.s.
http://www.autoweek.com/apps/pbcs.dl...4&Profile=1041
11-19-2007, 12:41 AM
#19
Shine off Toyota at auto show
http://www.wheels.ca/article/32947
Dee-Ann Durbin
Associated Press
Nov 15, 2007
LOS ANGELES – Toyota Motor Corp. is usually the darling of the Los Angeles Auto Show, but testy relations with environmentalists and questions about quality are making the show a headache for the automaker this year.
It doesn't help that Toyota chose to introduce a full-size sport utility vehicle at the show, and the redesigned Sequoia doesn't have a hybrid option like full-size SUVs from General Motors Corp. and Chrysler LLC that are debuting across the show floor. The Los Angeles show opens to the public Friday after two days of media previews.
After the Sequoia was introduced Wednesday, an environmental activist with a video camera approached Toyota's general manager for U.S. sales, Bob Carter, and asked why the company won't withdraw from a lawsuit against California, which has sued the U.S. Environmental Protection Agency to establish tougher fuel economy rules.
Carter refused to answer and knocked the camera out of Brent Olson's hands. Olson, of San Francisco-based Rainforest Action Network, was eventually led away by two policemen.
A handful of protesters also picketed Toyota outside the show and planned further protests Thursday.
After the spat, Carter said Toyota and environmentalists have more in common than not, and that Toyota supports tougher fuel economy standards but doesn't want them decided at the state level.
"We believe it's best applied at the federal level," he said. ``We're a full-line manufacturer and we want to meet consumer needs.''
He added that despite the rise in fuel prices, many U.S. buyers simply need the utility and space of a full-size SUV.
The Sequoia has a new 5.7-liter, V8 engine that is more powerful – at 381 horsepower – and more fuel efficient than the old engine. It also has improved aerodynamics to save fuel, and the company plans to introduce an ethanol-capable version in the fall of 2008. Pricing wasn't announced for the new Sequoia, which goes on sale in December.
Fuel economy numbers haven't been released, but Carter said they'll improve by about 12 percent over the old model, or 2 to 3 miles per gallon. The current Sequoia gets around 15 miles per gallon in the city, compared with 21 miles per gallon for the new hybrids from Chrysler and GM, including the Dodge Durango and Chrysler Aspen SUVs, the Chevrolet Tahoe SUV and Chevrolet Silverado pickup.
Carter said Toyota plans to offer hybrid versions of every vehicle in its lineup and is also studying combinations such as hybrid diesels. But it hasn't managed to develop a system that works well in large trucks like GM and Chrysler did in their consortium with Daimler and BMW.
"We're not there yet. There's no technology to meet all our customers' needs," he said.
Toyota's sterling reputation has taken a beating in recent months because of quality problems and environmentalists' anger. Toyota also was stung this fall by the departures of some key executives, including its North American chief, Jim Press, who left to become vice-chairman of Chrysler LLC, and its U.S. manager of Lexus, Jim Farley, who went to Ford Motor Co.
Last month, Consumer Reports said Toyota "is showing cracks in its armor" and will no longer get automatic recommendations from the magazine when it releases new or redesigned vehicles. It also removed several Toyota vehicles from its recommended list because of quality issues.
Toyota recalled 766,000 vehicles in the United States last year, down from 2.2 million in 2005 but still up significantly from the 210,000 vehicles it recalled in 2003.
Also last month, the Natural Resources Defense Council and other groups sent thousands of e-mails and faxes to Toyota urging it to support a Senate energy bill that would set a 35-mile-per-gallon average fuel economy standard by 2020. Toyota backs a more modest approach on so-called CAFE standards that would require 32 to 35 mpg by 2022.
The company's most recent embarrassment came earlier this week, when it pulled an ad that called Fresno a "low-budget tourist stop" after U.S. Sen. Dianne Feinstein wrote to complain.
Jim Lentz, president of Toyota's U.S. division, said the troubles are the result of Toyota's phenomenal growth.
"We knew we would become more of a target in terms of looking at what we do, good or bad," Lentz said.
And Toyota continues to have a lot in its favor. Dealers say the negative news hasn't had much effect on sales, Lentz said. The company still has 17 of the 39 most reliable vehicles on Consumer Reports' influential list, far more than any other automaker.
Toyota last week reported a hefty $4 billion profit in its fiscal second quarter, the same day that GM reported a record $39 billion quarterly loss because of accounting changes. Toyota also is hot on the heels of GM to become the world's largest carmaker. Toyota sold 7.05 million vehicles in the first nine months of this year, just 10,000 less than GM.
Associated Press
Nov 15, 2007
LOS ANGELES – Toyota Motor Corp. is usually the darling of the Los Angeles Auto Show, but testy relations with environmentalists and questions about quality are making the show a headache for the automaker this year.
It doesn't help that Toyota chose to introduce a full-size sport utility vehicle at the show, and the redesigned Sequoia doesn't have a hybrid option like full-size SUVs from General Motors Corp. and Chrysler LLC that are debuting across the show floor. The Los Angeles show opens to the public Friday after two days of media previews.
After the Sequoia was introduced Wednesday, an environmental activist with a video camera approached Toyota's general manager for U.S. sales, Bob Carter, and asked why the company won't withdraw from a lawsuit against California, which has sued the U.S. Environmental Protection Agency to establish tougher fuel economy rules.
Carter refused to answer and knocked the camera out of Brent Olson's hands. Olson, of San Francisco-based Rainforest Action Network, was eventually led away by two policemen.
A handful of protesters also picketed Toyota outside the show and planned further protests Thursday.
After the spat, Carter said Toyota and environmentalists have more in common than not, and that Toyota supports tougher fuel economy standards but doesn't want them decided at the state level.
"We believe it's best applied at the federal level," he said. ``We're a full-line manufacturer and we want to meet consumer needs.''
He added that despite the rise in fuel prices, many U.S. buyers simply need the utility and space of a full-size SUV.
The Sequoia has a new 5.7-liter, V8 engine that is more powerful – at 381 horsepower – and more fuel efficient than the old engine. It also has improved aerodynamics to save fuel, and the company plans to introduce an ethanol-capable version in the fall of 2008. Pricing wasn't announced for the new Sequoia, which goes on sale in December.
Fuel economy numbers haven't been released, but Carter said they'll improve by about 12 percent over the old model, or 2 to 3 miles per gallon. The current Sequoia gets around 15 miles per gallon in the city, compared with 21 miles per gallon for the new hybrids from Chrysler and GM, including the Dodge Durango and Chrysler Aspen SUVs, the Chevrolet Tahoe SUV and Chevrolet Silverado pickup.
Carter said Toyota plans to offer hybrid versions of every vehicle in its lineup and is also studying combinations such as hybrid diesels. But it hasn't managed to develop a system that works well in large trucks like GM and Chrysler did in their consortium with Daimler and BMW.
"We're not there yet. There's no technology to meet all our customers' needs," he said.
Toyota's sterling reputation has taken a beating in recent months because of quality problems and environmentalists' anger. Toyota also was stung this fall by the departures of some key executives, including its North American chief, Jim Press, who left to become vice-chairman of Chrysler LLC, and its U.S. manager of Lexus, Jim Farley, who went to Ford Motor Co.
Last month, Consumer Reports said Toyota "is showing cracks in its armor" and will no longer get automatic recommendations from the magazine when it releases new or redesigned vehicles. It also removed several Toyota vehicles from its recommended list because of quality issues.
Toyota recalled 766,000 vehicles in the United States last year, down from 2.2 million in 2005 but still up significantly from the 210,000 vehicles it recalled in 2003.
Also last month, the Natural Resources Defense Council and other groups sent thousands of e-mails and faxes to Toyota urging it to support a Senate energy bill that would set a 35-mile-per-gallon average fuel economy standard by 2020. Toyota backs a more modest approach on so-called CAFE standards that would require 32 to 35 mpg by 2022.
The company's most recent embarrassment came earlier this week, when it pulled an ad that called Fresno a "low-budget tourist stop" after U.S. Sen. Dianne Feinstein wrote to complain.
Jim Lentz, president of Toyota's U.S. division, said the troubles are the result of Toyota's phenomenal growth.
"We knew we would become more of a target in terms of looking at what we do, good or bad," Lentz said.
And Toyota continues to have a lot in its favor. Dealers say the negative news hasn't had much effect on sales, Lentz said. The company still has 17 of the 39 most reliable vehicles on Consumer Reports' influential list, far more than any other automaker.
Toyota last week reported a hefty $4 billion profit in its fiscal second quarter, the same day that GM reported a record $39 billion quarterly loss because of accounting changes. Toyota also is hot on the heels of GM to become the world's largest carmaker. Toyota sold 7.05 million vehicles in the first nine months of this year, just 10,000 less than GM.
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