Toyota blames rapid growth for quality problems
The Associated Press
Published: March 13, 2008


TOKYO: The president of Toyota Motor acknowledged Thursday its rapid global growth was partly behind an increase in quality problems in recent years.

The company has improved quality controls and is sticking to its sales targets, including those in North America, despite worries about a credit crunch and a slowdown in the auto market, said the president, Katsuaki Watanabe.

Speaking at the Japan National Press Club, Watanabe said the reasons behind the defects were varied, involving development, design, production, suppliers and maintenance.

But Watanabe said that at least some of the problems, including time pressures and shortage of experts, stemmed from the company's huge growth in recent years. "That is not zero," he said, referring to quality problems rooted in Toyota's expansion.

Watanabe has generally been frank about acknowledging challenges facing the company as it enters markets and builds plants. Still, his comments highlight a sense of a crisis at Toyota, which is trying to maintain its sterling reputation for quality as it seeks to expand globally, especially in emerging markets like Brazil, China and Russia.

"The fact that Toyota is growing globally suddenly shouldn't be used as an excuse," Watanabe said.

Last year, Toyota overtook General Motors as the world's No. 1 automaker in global vehicle production, although GM still retains the top spot in global vehicle sales.

Toyota made a record 9,497,754 vehicles worldwide in 2007, up 5.3 percent from the previous year, compared with 9.284 million for GM. But Toyota sold fewer vehicles at 9.366 million, compared with 9,369,524 for General Motors. GM has been the world's top seller for 77 years.

Watanabe said he had ordered a six-month delay in some products to tackle quality controls after the problems surfaced. He did not give details.

Toyota has gone over, one by one, each problem, tracking root causes, analyzing and coming up with ways to prevent a recurrence, Watanabe said. He even referred to "big company disease" caused by arrogance among its ranks.

Since 2006, when the alarming rise in recalls began to surface, Watanabe has apologized repeatedly at news conferences in Japan.

He also said he was aware of the concerns about falling U.S. auto sales amid a slowdown in the American economy. This year is expected to be the slowest in a decade for the U.S. auto industry. But automakers are still predicting that sales will pick up in the second half thanks to the U.S. government's economic stimulus package and pent-up demand.

Watanabe brushed off the worries. Overall American auto sales this year are likely to remain about the same as last year, and Toyota is expecting its regional sales to rise this year, he said. Toyota is expecting U.S. sales to climb 1 percent from 2007 to 2.64 million vehicles in 2008.

"I feel U.S. economic fundamentals are strong," Watanabe said.


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