Proactively recalling 1 million cars,Toyota can burnish already excellent reputation
05-31-06, 07:50 PM
#1
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Proactively recalling 1 million cars,Toyota can burnish already excellent reputation
By Jon Miller - May 31, 2006 01:46 PM
A Washington Street Journal article on May 31, 2006 reports that once again, Toyota Recalls Some Prius Cars. That's some 170,000 Prius vehicles. If you include the other models it's nearly a million cars recalled for parts not strong enough and at risk of cracking under stress.
What's going on at Toyota? It seems like nearly every month or two there is another wave of recalls. Is Toyota, famed for built-in quality losing its quality edge? Not likely.
The recall numbers are getting bigger because Toyota is doing design kaizen to reduce cost. As they move increasingly towards common designs for parts and the sharing of parts across a wider range of vehicles in an effort to drive down cost, recalls are increasing.
With common parts you have one part serving millions of vehicles instead of a dozen parts each serving hundreds of thousands. When more parts are affected, the recalls numbers will be bigger.
Parts designed for use across a range of vehicles pushes the limits of what the parts can do. Parts designed for one model of vehicle are more robust since it was designed and tested for that particular model. When a single part design is needed to perform for a variety of vehicles, it may not function so well for all models that use it.
Toyota is pursuing aggressive cost reduction through common platform vehicles and common parts. Just like the parts themselves are cracking under stress, the drive to reduce cost by design kaizen is showing cracks under stress. Toyota will weather these recalls as they learn from them and solve these design problems. Long-term it's a winning strategy.
source HERE
A Washington Street Journal article on May 31, 2006 reports that once again, Toyota Recalls Some Prius Cars. That's some 170,000 Prius vehicles. If you include the other models it's nearly a million cars recalled for parts not strong enough and at risk of cracking under stress.
What's going on at Toyota? It seems like nearly every month or two there is another wave of recalls. Is Toyota, famed for built-in quality losing its quality edge? Not likely.
The recall numbers are getting bigger because Toyota is doing design kaizen to reduce cost. As they move increasingly towards common designs for parts and the sharing of parts across a wider range of vehicles in an effort to drive down cost, recalls are increasing.
With common parts you have one part serving millions of vehicles instead of a dozen parts each serving hundreds of thousands. When more parts are affected, the recalls numbers will be bigger.
Parts designed for use across a range of vehicles pushes the limits of what the parts can do. Parts designed for one model of vehicle are more robust since it was designed and tested for that particular model. When a single part design is needed to perform for a variety of vehicles, it may not function so well for all models that use it.
Toyota is pursuing aggressive cost reduction through common platform vehicles and common parts. Just like the parts themselves are cracking under stress, the drive to reduce cost by design kaizen is showing cracks under stress. Toyota will weather these recalls as they learn from them and solve these design problems. Long-term it's a winning strategy.
source HERE
06-01-06, 07:47 AM
#3
Toyota will weather these recalls as they learn from them and solve these design problems. Long-term it's a winning strategy.
If Toyota relies on cost cutting and using only one item for millions of cars, they need to get the best quality item. Although it costs more to get the best, at least they'll save money by buying only one kind, instead of a dozen different kinds for several different models.
Quality, not quantity. It works for this as well.
06-05-06, 02:01 PM
#5
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Toyota Recall Not So Total
JUNE 1, 2006
By Matt Vella
By proactively recalling nearly 1 million cars worldwide, Toyota can burnish its already excellent reputation for customer service
Toyota's recall of nearly 1 million cars on Tuesday no doubt cheered its competition in Detroit by raising concerns about the carmaker's vaunted quality. Or does it?
The defect in question is a faulty steering component that could cause drivers to lose control of their cars. The company, which is offering to service all 986,000 cars affected, said in a statement that no accidents have yet been reported. The recall spans 10 models, which are primarily sold throughout Japan and Europe. In fact, more than half of the affected vehicles are in Toyota's home territory, though 170,000 American Prius cars, of a total 268,000 sold since its introduction in 2000, are included.
This is hardly the first time that Toyotas have been recalled. In 2005, Toyota (TM) recalled nearly 800,000 American pickup trucks and SUVs with suspension flaws. That followed a 2002 worldwide recall of 400,000 subcompacts with brake-fluid problems.
OPPORTUNITY KNOCKS. But despite the critics' finger-pointing, many analysts contend the event is more of an opportunity than a liability for the growing company.
Indeed, in recent years, recalls have shifted from a public-relations headache to a customer-service opportunity. Insiders say that unless a manufacturer hides vital information or vehicle defects lead to fatal crashes -- as they did during Ford's (F) Firestone scandal in 2000 and 2001 -- brands even stand to benefit from well-managed recalls.
"First of all, well-handled recalls have absolutely no impact on future sales," says Mark Hass, the former deputy managing editor of the Detroit News and now CEO of the automotive public relations firm Hass MS&L. "Recalls are really customer-relationship issues these days, not marketing. They're an opportunity to build customer loyalty, brand loyalty."
ON THE CASE. Despite the high number of vehicles affected, analysts expect this recall to go largely unnoticed by unaffected potential Toyota buyers. "It's almost like once there's something as sensational as the Explorer rollovers, which were so huge, with congressional hearings, et cetera, that it sucks the oxygen out of the room for the next one," adds Hass.
Instead, Toyota can benefit from the recalls, Hass and others say, by being as transparent as possible and providing prompt, courteous assistance to recall customers -- a play the manufacturer has accomplished in the past by including extras such as servicing older vehicles that it wasn't required to by law.
Analysts also note that recalls from Toyota and other large manufacturers are likely to go up, as is the overall number of vehicles affected. "This is just the reality of the industry these days," says Joe Barkai, program director for automotive research with the manufacturing insights division of IDC, a Framingham (Mass.) global market-research firm. "When you consider the enormous pressure to get to market in less and less time -- down to 20 months from four or five years a decade ago -- it makes a lot of sense. There's just less time to discover these issues."
AHEAD OF THE PACK. Barkai contends the most effective way to measure a manufacturer's performance isn't the frequency of recalls or the number of vehicles affected. Rather, Barkai studies the amount manufacturers pay in warranty costs relative to their revenues. By comparison, Toyota outshines its major American competitors, spending a mere estimated 1.5%, vs. the domestic average of 2.5%. At the extreme end of the scale, General Motors (GM) spends 3%.
Indeed, Toyota still largely exceeds industry averages for initial quality in surveys conducted by organizations such as J.D. Power & Assoc. In Power's 2005 Vehicle Dependability Index study, Toyota maintained an 18% margin over the industry average. It's the only manufacturer besides BMW with two cars on Edmund's top 10 list of vehicles with the best residual value. And in Consumer Reports' annual car issue, published in March of this year, Toyota outranks Ford and Chrysler for long-term reliability.
In admitting the fault, Toyota executives pointed to its internal mantra, kaizen, the Japanese term that means continual improvement. Ernest Bastien, Toyota's vice-president of vehicle operations, says the problem had already been addressed on the assembly lines, and that the company had come forward without being urged to by the National Highway Traffic Safety Administration.
SHOCK ABSORBERS. "Nothing is more important than protecting our brand image," says Bastien. "Our institutional view is that any time there's a problem, a change is made right away." Bastien also noted that Toyota was developing new supplier-valuation programs and making advances in early-warning electronic diagnostics.
Unless Toyota starts mishandling recalls, sales sag, or publications stop issuing praise, those snarky smiles will most likely fade from Detroit's face. After all, as Barkai points out, "Toyota is better structured to fix these types of problems. They're very good at executing decisions, everybody falls in line. For domestic manufacturers, it still takes a long time to learn those lessons."
At the market close on May 31, American depositary shares of Japan-based Toyota Motor were down 80 cents at $107.02, or 0.44%. The sharpest drop-off came after the minutes were released from the latest Federal Reserve meeting, indicating the possibility of another interest rate hike in June.
source : businessweek
By Matt Vella
By proactively recalling nearly 1 million cars worldwide, Toyota can burnish its already excellent reputation for customer service
Toyota's recall of nearly 1 million cars on Tuesday no doubt cheered its competition in Detroit by raising concerns about the carmaker's vaunted quality. Or does it?
The defect in question is a faulty steering component that could cause drivers to lose control of their cars. The company, which is offering to service all 986,000 cars affected, said in a statement that no accidents have yet been reported. The recall spans 10 models, which are primarily sold throughout Japan and Europe. In fact, more than half of the affected vehicles are in Toyota's home territory, though 170,000 American Prius cars, of a total 268,000 sold since its introduction in 2000, are included.
This is hardly the first time that Toyotas have been recalled. In 2005, Toyota (TM) recalled nearly 800,000 American pickup trucks and SUVs with suspension flaws. That followed a 2002 worldwide recall of 400,000 subcompacts with brake-fluid problems.
OPPORTUNITY KNOCKS. But despite the critics' finger-pointing, many analysts contend the event is more of an opportunity than a liability for the growing company.
Indeed, in recent years, recalls have shifted from a public-relations headache to a customer-service opportunity. Insiders say that unless a manufacturer hides vital information or vehicle defects lead to fatal crashes -- as they did during Ford's (F) Firestone scandal in 2000 and 2001 -- brands even stand to benefit from well-managed recalls.
"First of all, well-handled recalls have absolutely no impact on future sales," says Mark Hass, the former deputy managing editor of the Detroit News and now CEO of the automotive public relations firm Hass MS&L. "Recalls are really customer-relationship issues these days, not marketing. They're an opportunity to build customer loyalty, brand loyalty."
ON THE CASE. Despite the high number of vehicles affected, analysts expect this recall to go largely unnoticed by unaffected potential Toyota buyers. "It's almost like once there's something as sensational as the Explorer rollovers, which were so huge, with congressional hearings, et cetera, that it sucks the oxygen out of the room for the next one," adds Hass.
Instead, Toyota can benefit from the recalls, Hass and others say, by being as transparent as possible and providing prompt, courteous assistance to recall customers -- a play the manufacturer has accomplished in the past by including extras such as servicing older vehicles that it wasn't required to by law.
Analysts also note that recalls from Toyota and other large manufacturers are likely to go up, as is the overall number of vehicles affected. "This is just the reality of the industry these days," says Joe Barkai, program director for automotive research with the manufacturing insights division of IDC, a Framingham (Mass.) global market-research firm. "When you consider the enormous pressure to get to market in less and less time -- down to 20 months from four or five years a decade ago -- it makes a lot of sense. There's just less time to discover these issues."
AHEAD OF THE PACK. Barkai contends the most effective way to measure a manufacturer's performance isn't the frequency of recalls or the number of vehicles affected. Rather, Barkai studies the amount manufacturers pay in warranty costs relative to their revenues. By comparison, Toyota outshines its major American competitors, spending a mere estimated 1.5%, vs. the domestic average of 2.5%. At the extreme end of the scale, General Motors (GM) spends 3%.
Indeed, Toyota still largely exceeds industry averages for initial quality in surveys conducted by organizations such as J.D. Power & Assoc. In Power's 2005 Vehicle Dependability Index study, Toyota maintained an 18% margin over the industry average. It's the only manufacturer besides BMW with two cars on Edmund's top 10 list of vehicles with the best residual value. And in Consumer Reports' annual car issue, published in March of this year, Toyota outranks Ford and Chrysler for long-term reliability.
In admitting the fault, Toyota executives pointed to its internal mantra, kaizen, the Japanese term that means continual improvement. Ernest Bastien, Toyota's vice-president of vehicle operations, says the problem had already been addressed on the assembly lines, and that the company had come forward without being urged to by the National Highway Traffic Safety Administration.
SHOCK ABSORBERS. "Nothing is more important than protecting our brand image," says Bastien. "Our institutional view is that any time there's a problem, a change is made right away." Bastien also noted that Toyota was developing new supplier-valuation programs and making advances in early-warning electronic diagnostics.
Unless Toyota starts mishandling recalls, sales sag, or publications stop issuing praise, those snarky smiles will most likely fade from Detroit's face. After all, as Barkai points out, "Toyota is better structured to fix these types of problems. They're very good at executing decisions, everybody falls in line. For domestic manufacturers, it still takes a long time to learn those lessons."
At the market close on May 31, American depositary shares of Japan-based Toyota Motor were down 80 cents at $107.02, or 0.44%. The sharpest drop-off came after the minutes were released from the latest Federal Reserve meeting, indicating the possibility of another interest rate hike in June.
source : businessweek
06-05-06, 03:12 PM
#6
Lexus Champion
Most car customers today expect recalls on their cars. Strangely I think it is a good sign that
they find 'flaws' in designs and take responsibility to fix them at no cost to the consumer.s
How it is handled is the saving grace. Make it quick and easy and you will retain your customers
and build future sales. I think people probably want their cars to be better than when they
bought new.....
they find 'flaws' in designs and take responsibility to fix them at no cost to the consumer.s
How it is handled is the saving grace. Make it quick and easy and you will retain your customers
and build future sales. I think people probably want their cars to be better than when they
bought new.....
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06-06-06, 04:36 AM
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Originally Posted by Hypnotik
Looks like toyota is following in nissan's footsteps in cost cutting since it is more profitable
Toyota reduces cost through becoming more efficient in designing the parts and parts sharing. Nissan however, although it does many things like Toyota, they do something Toyota doesn’t, and that is reduce cost by producing cheap quality-average assembly interiors and hire untrained workers. And it was obvious from 2001 up until 2005 at least through the Nissan Armada, Quest, Titan, Altima and Infiniti QX56 just to name a few.
Toyota is usually proactive when it comes to recalls
; Nissan usually waits till things get somewhat out of hand.I'm not saying im happy because Toyota has recalled cars, but with Toyota producing what, nearly twice as much vehicles then Nissan, and growing faster (btw Nissan sales have been down for several months, thats bad) it may be expected that a few glitches here and there on some models would appear; at least they are offering customers to fix them and ensuring future buyers that this problem has been fixed.
06-06-06, 08:40 AM
#9
Originally Posted by LexArazzo
Toyota is pursuing aggressive cost reduction through common platform vehicles and common parts.
06-06-06, 09:25 AM
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Originally Posted by LexArazzo
Recalls are expensive both directly and indirectly; directly through the costs of parts and labor and indirectly through a possible reduction in brand or nameplate capital.
If the recalls become more costly than the alternative, producing quality parts for each vehicle, then this is far from progress.
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