Toyota Motor Recall Crisis: Case-study

Facts about the case:

Crisis is something that mostly happened to every company, with different level of damaged.

Not just happened in unstable small company, crises can also happened in a big, well known

company, with a good reputation, such as Toyota Motor Corp.

Toyota Motor Corp is one of the biggest automotive companies in the world. According to

Fortune Magazine, from 1997 – 2007, Toyota Motor Corp lies in second position, after General

Motor in their 25th annual list of America’s Most Admired Company.

In late 2009 Toyota became the subject of media and U.S. government scrutiny after multiple

deaths and injuries were attributed to accidents resulting from the unintended and uncontrolled

acceleration of its cars. Despite Toyota’s voluntary recall of 4.2 million vehicles for floor mats

that could jam the accelerator pedal and a later recall to increase the space between the gas pedal

and the floor, the company insisted there was no underlying defect and defended itself against

media reports and regulatory statements. As the crisis escalated, Toyota was further criticized for

its unwillingness to share information from its data recorders about possible problems with

electronic throttle controls and sticky accelerator pedals, as well as braking problems with the

Prius. By the time Toyota Motor Company President Akio Toyoda apologized in his testimony

to the U.S. Congress, Toyota’s stock price had declined more than 12% so far this year.

Q.1 “Toyota’s crisis is bigger than a simple repair job”. List the deficiencies in Toyota’s

communications strategy.

Corporate crisis communication failure can create outrageous consequences for the company.

The following were the deficiencies in Toyota’s communication strategy;

1. Toyota had knowledge of the defects since 2007, but they did not take a serious action to

resolve the issues.

2. When NHTSA (National Highway traffic Safety Administration) launched an

investigation into Toyota Motors Corp’s 2000 and 2001 models, a Toyota representative

was not immediately available for comment.

3. Inaccurate & misleading information to customers saying “no defect exists in vehicles in

which the driver’s floor mat is compatible with the vehicle & properly secured”.

4. Toyota did not respond whereas the NTHSA recommended customers to remove the

floor mats from affected cars to eliminate risk, which was Toyota’s responsibility to

address its customers.

5. The company took quite a while to investigate the problems while accidents continued.

6. It was too late by the time the President of Toyota stood to apologize & address the

issue.

Q.2 As Toyota’s PR & communications consultant list solutions to rebuild its sullied image

and public trust.

Because crisis can be happened to every company, anytime, so every company should be

prepared for this situation, with a good plan, and of course with a good action, to protect the

company reputation. The following solutions are suggested

1. Re-launching the recall strategy.

Toyota can redefine its recall strategy. Re-launching in other words, addressing customers that

Toyota is not just recalling to repair the defects but also to add some more safety measures

which could avoid any future defects in the model. Ensuring the customers as their safety is the

first priority.

2. Promotional discounts.

President of Toyota, addressing the congress and all American citizens, about accident that

related with Toyota recall for more than 8 million cars in United States. The good thing is,

whatever the reason, whoever they thing as a source of the problem, Toyota Motor Corp take a

big responsibility for this crisis. Their willingness to recall all products with problems is the

evidence. A promotional discount includes all the owner of the product can get services and

spare parts replacement without any charges at all Toyota’s dealer. This gives a piece of relief to

the customers & also ensures that Toyota do takes care of its customers in an appropriate way.

3. Word of mouth.

Announcing that their product had a several problems also means that they try to spread the

information openly and truthfully. They spread the information through media, letter, website,

and of course through every Toyota’s person at their dealer. Not just the information about the

recall, but how they can drive safely, if their car not yet been serviced.

Although a lot of people would say that it’s too late for Toyota to response the problems on

their car that had been reported before, but still its appreciable what Toyota have done until

now.

4. One voice.

There are several people that have right to inform any kind of data or information from Toyota

Motor Corp to the public. But, mainly, the President of Toyota Motor Corp, Akio Toyoda,

conduct the responsibility to be the true representative of Toyota Company. This can make a

better impact than any other person addressing as a spokesperson from Toyota. When the

president himself is accepting & ensuring that there will be a better service provided in future.

Furthermore he takes great responsibility to maintain his corporate reputation, with facing the

American congress.

United States is the heart of the world. So, I think, facing the congress is the best strategy,

because, if Toyoda can convince the United States congress, its believed that it also means

Toyoda already facing and convince the world that Toyota company already do the right things

to do to fix all the problems. As they still have “Customer first” attitude.