Swimming with sharks

Feb 15, 2010

“Oh what a feeling! Toyota.”

The slogan and jingle of the 1980s is hauntingly harassing Toyota 30 years later.

And with ironic cause.

Toyota went from the car manufacturer of high regard, high quality and high-volume sales to a company on the verge of a nervous breakdown. All because of the now-infamous accelerator, and followed by the carmaker’s brake problem emerging with its hybrid Prius, the best-selling of hybrid passenger cars, and some Lexus hybrids.

Not quite a pariah, but it will take Toyota a remarkable and honest marketing and engineering feat to rebuild its lost trust with consumers. The company’s been doing that, finally, as well as, finally, attempting to repair the more than 7 million accelerators worldwide and about 437,000 brakes on a massive scale, with some dealerships operating 24/7 to make the fixes.

In the meantime, the National Highway Traffic Safety Administration, after going to Japan and pressuring Toyota to not be “safety deaf” and issue a recall on the accelerator, is still looking at when the automaker knew there problems.

Not a good feeling.

Much has been written about what has surfaced as Toyota’s lax oversight in quality control. Maybe it was trust in its own engineering, maybe it was a touch of the big-business hubris of the past 10 years. (Three decades ago, Ford allowed projected cost savings of $11 per vehicle to deter the carmaker from having a simple shield to protect rupturing and ensuing explosions of its fuel tanks in Pintos in rear-end collisions. People died. Estimates were that it could have cost Ford as little as $1 to engineer a fix during production.)

Regardless, Toyota has allowed itself to fall so far from grace that others make themselves look good at the Japanese automaker’s expense. Hyundai, Ford, Kia and Honda have been the biggest beneficiaries, gaining consumer interest against Camry and Corolla, according to Kelley Blue Book.

With all the self-inflicted bloodletting Toyota had done, its competitors smelled the blood in the water and swam in to get a piece of Toyota. Of late, the major U.S. manufacturers as well as their foreign counterparts have sought to capitalize on Toyota’s massive woes. Several had targeted Toyota owners of affected vehicles with enticements to trade in their Toyotas and buy their own brands, sort of a “cash for clunkers” pay-off. For the majority of Toyota owners, that would be a bad deal because their cars are likely way undervalued, and the dealers who get the traded-in Toyotas can have them repaired for free, then resell them at an even higher used-car profit.

The Japanese automaker’s now-public (and public relation) mea culpas of remorse may win over consumers once the accelerators and brakes (and who-knows-what-else may arise) are repaired and the news becomes relegated to short blurbs buried within a news’ business section. Ford, after all, overcame the Pinto debacle and the automaker is still very much alive and doing well.

Eventually, certainly sometime within 2010’s spring, summer and/or fall sales events, Toyota will rise again, doing whatever it can to get itself back on top. And that will mean car wars. Car wars that should be a boon to consumers as prices become more competitive than what they’ve seen in years. And that will mean consumers will have more pocket money for customizing, for personalizing, their vehicles.

And that, if restylers prepare themselves with their own ready-to-go marketing plans and materials, could spell a boon to their businesses.

Swimming with sharks can be exciting – if you’re prepared.

Oh what a feeling that could be.