GFerg

Friday September 23, 4:23 PM EDT

DETROIT -(Dow Jones)- Toyota Motor Corp. (7203.TO) found itself in the rare position of defending its quality record in the U.S. market in response to comments made by a General Motors Corp. (GM) (GM) official earlier this week.

Toyota, long seen as the benchmark for durability due to its consistent string of high scores on studies released by various quality tracking firms, was criticized by GM's product planning chief, John Smith, for "living off" its quality reputation in recent years, according to a Reuters news report. He said the Japanese automaker has been recalling more vehicles recently.

GM spokesman Pat Morrissey declined to comment on the report.

Jim Press, president and chief operating officer of Toyota Motor Sales USA Inc. , eagerly responded, however, defending the Japanese automaker's quality performance in an interview. "I can assure Mr. Smith, or anyone else, that no company has ever worked harder to improve quality in our company than we do today."




Still, the amount of cars and light trucks the automaker is recalling on an annual basis has grown exponentially over the last three years, according to the National Highway Traffic Safety Administration. NHTSA spokesman Eric Bolton said Toyota recalled 212,000 vehicles in 2003, but the recall count ballooned to 1.3 million vehicles in 2004.

In 2005, the automaker has recalled 2.1 million vehicles, including calling back 978,000 SUVs and pickups over concern the rod linking the steering wheel to the wheels could break. It was the second 750,000-plus vehicle recall this year for Toyota in the U.S.

Toyota's quality reputation has served the automaker well in its recent market-share grab in the U.S. The company's share in the U.S., including the Lexus Scion brands, sits at 13% through nine months this year, up from 12.2% at the end of 2004 and 10.2% in 2003, according to automotive publication Ward's Auto Reports.

Press pointed to the Transportation, Recall, Enhancement, Accountability and Documentation Act, or TREAD, enacted in the summer of 2003, as reason for Toyota's recall spike. He said other automaker's recalls, including the tally at GM, have increased in recent years due to the new regulations, which are overseen by NHTSA and more strictly govern when a recall needs to be announced.

Press said TREAD has redefined what a recall is. Traditionally, recalls were initiated when something broke on a car, such as a part failure or electronic glitch, but now automakers are forced to be meticulous and recall vehicles when the possibility for failure arises.

"I think recalls are no longer an issue of just quality," Press said. "I think that TREAD reporting has allowed us to identify ways that we can improve the performance of vehicles that necessarily don't have a defect."

The Toyota executive said his company's vehicles continue to boast strong residual values and the brand demands continued loyalty from its customer base. "An event like (a) recall in and of itself does not hurt your image or reputation," Press said. "More people come back and buy our cars than buy others."

AMR Research auto analyst Kevin Mixer said a lot of skeptics blame Toyota's troubles on the rapid growth of the company in the U.S. and the inevitable oversights that happen at large companies that are continually adding plants and employees to its established quality system. He said the theory, however, is unlikely given Toyota's track record with Lexus when it launched the brand in 1989 in the U.S.

"One of the ways Lexus earned its stripes as best in quality is they pulled back a number of vehicles after it first launched," he said. Toyota, as it grows, is fine-tuning its reputation in the U.S., he said, which could be why it is meticulously combing the quality performance of each of its vehicles.

As for TREAD, it has increased the number of recalls of most manufacturers as what used to be minor issues are now being reported to the government, Mixer said.

GM spokesman Morrissey agrees TREAD's impact has increased the recall count at the world's largest automaker.

Last year, according to Mixer, "GM owned 60% of recalls in the U.S.," but that number has declined in 2005.

Toyota continues to back up its rhetoric, perennially scoring at the top of two significant quality studies released annually by J.D. Power and Associates that rank initial quality performance after 90 days of ownership and durability after 3 years of ownership. In 2005, Toyota's Lexus luxury brand remained the top scorer of all individual nameplates on both lists while the Toyota brand came in well above average.

Nevertheless, Toyota has had its hiccups when it comes to J.D. Power and Associates results. In 2004, the Toyota lineup of vehicles, which includes the best-selling Camry sedan, ranked behind Hyundai Motor Co. (005380.SE) in the initial quality poll as best among high-volume nameplates.

The Scion brand, aimed at young buyers, also struggled in 2004 in the survey, scoring fourth from the bottom of the list of brands on sale in the U.S. Scion marketing officials blamed the finicky tastes and high demands of first-time buyers for the poor showing.

Scion rebounded somewhat in 2005, but remained far below the industry average and behind most other brands.

-By John D. Stoll, Dow Jones Newswires; (313) 226-1249; john.stoll@ dowjones.com

(END) Dow Jones Newswires

09-23-05 1623ET

Copyright (c) 2005 Dow Jones & Company, Inc.

Falcon LS

Maybe GM should focus on trying to reach Toyota's quality levels before it can start critisizing Toyota for having "x" amount of increase in recalls. Talk is cheap.

mmarshall

Arguement: Toyota, long seen as the benchmark for durability due to its consistent string of high scores on studies released by various quality tracking firms, was criticized by GM's product planning chief, John Smith, for "living off" its quality reputation in recent years,


My response: Well, Mr. Smith........you can't "live off a quality repuation" you don't HAVE.







Arguement: Nevertheless, Toyota has had its hiccups when it comes to J.D. Power and Associates results. In 2004, the Toyota lineup of vehicles, which includes the best-selling Camry sedan, ranked behind Hyundai Motor Co. (005380.SE) in the initial quality poll as best among high-volume nameplates.

My response: I've been saying for some time now that Hyundai and Kia products were no longer junk....but to be fair, Consumer Reports is really a better source for this than J.D. Power.





Arguement: The Scion brand, aimed at young buyers, also struggled in 2004 in the survey, scoring fourth from the bottom of the list of brands on sale in the U.S. Scion marketing officials blamed the finicky tastes and high demands of first-time buyers for the poor showing. Scion rebounded somewhat in 2005, but remained far below the industry average and behind most other brands.


My response: Scions, like all Toyota products, are well-built, but even aside from looks ( which is generally a matter of personal taste ), the Scion xA and XB ( not the tC) have a tinny, cheap FEEL to them even though they are NOT cheaply built. The thin sheet metal and "clink" sound you get closing the doors instead of a solid thud turns some people off.

UptownGS

basically here's the run down....

hypothetical of course.

This year GM recalls 100 cars

Toyota recalls 100 cars also......

but GM only sold 200 cars while TOyota sold 100,000 vehicles. So yea they have more recalls but they also have more sales...

lol.... ionno, just thought that might be funny to think about.

RX469

iTrader: (1)

Wow, you're the first person ~i've~ come across that I agree with. I do get a 'cheap' feel with the Scions, even the Tc. Although there's a Tc at every traffic light.

RON430

OK, let's it get it out up front. There are some things about my Lexus that I am not crazy about. The laughable attempts by the dealer, of course after giving me the GMspeak of "No other GS owner has ever complained of ticking coming from the sunroof or found it to be on the loud side", were just about what I would expect from a Chevy dealer. And let's pass on a word of caution to Lexus,don't get comfy with your reliability reputation. And something else, Lexus has been around long enough now, get someone who knows suspensions to make you a performance sedan. Maybe the new IS comes closer but the new GS does not IMO.

Let's also acknowledge that we have as many single minded, arrogant, Lexus uber alles supporters as any marque's internet site.

But now (and are you listening GM?) let's get to it. Does anyone have any possible idea how many people on the face of the planet have owned Toyota manufactured vehicle AND a GM produced vehicle who find the comments from GM to be anything other than laughable? GM has turned self delusion into an art form and it is good see if it is alive and well. Here's a bit of advice for the General, if you think you are going to make sales based on reiiability by pointing out Toyota's recent recall record you better sharpen up that layoff pen because you are going to need to get rid of tens of thousands of white collar and union employees all the way up to the time you file bankruptcy. If you want to solve your problems, which are too great to list on the internet, not enough bandwidth or storage space, you had better get some people in who will finally be willing to admit what the problems are. Last point, and I know a couple of you disagree but if savior Lutz's plan is the GTO and Solstice, it's time to get yourself a new savior. Does this topic really warrant much more comment from us? If GM wants to address the market in this manner I don't know if we have to play along. End of rant.

AJ

Nice way of thinking