How Toyota Recall Hurt Its 2010 Profit

Toyota, the largest car manufacturer in the world, have recently recalled millions of its vehicles because of faulty accelerator pedals to prevent possible and more accidents. 

In January 26, the notice for the recall came as some 2.3 million Toyota-made cars concerning eight models have been discovered to have sticking gas pedals that causes the car to accelerate non stop.

Here are the list of Toyota models being recalled:

Corolla (2009-2010)
RAV4 (2009-2010)
Matrix (2009-2010)
Avalon (2005-2010)
Camry (2007-2010)
Highlander (2010)
Tundra (2007-2010)
Sequoia (2008-2010)

Not all Camry models have the problem with sticking accelerator pedal, specifically Camry Hybrids.  Unlisted Toyota models such as the Yaris, Land Cruiser, Tacoma, Prius, etc. have also passed quality inspection.

In North America, six assembly plants have halt production of these particular Toyota models. 

This has costed Toyota Motors Corp. both substantial profit loss and their reputation as a reliable car manufacturer.  In terms of sale, Toyota has sold more cars than any other car company in the world, making them number one.  After this incident, however, the future of Toyota looks bleak and it needs to do everything in its power to make it up to consumers if it wishes to regain consumer trust again.

The likelihood of a similar recall happening to the European market could also occur because some parts of the gas pedals that are used in North America are also used on some Toyota models in Europe.  It is believed that only one supplier from the United States manufactures the defective gas pedal part.

A previous incident in Japan back in 2006 concerning Toyota is also being related to the recent recall.  The incident involved the Japanese government conducting a criminal investigation on Toyota because of several accidents that took place and were traced to manufacturing problems.  Even though the company or somebody from the company was in no way charged, this incident has come back to haunt the company in a certain way.

Shares of Toyota in the Tokyo stock market were said to have fallen 4.3 per cent right after the recall.
Toyota has previously announced that its projected car sales forecast in North America will be over 2 million cars and more than 8 million car sales worldwide for this year.  Then again, due to this recent embarrassment, that sales forecast could dramatically go down or could even cost Toyota huge in their sales profit.

The quality control conundrum Toyota’s now having is also being blamed on the growth plan which was spearheaded by its previous president Katsuaki Watanabe.  The growth strategy involved increased and speedy production which is said to have played a role poor quality control.  After 4 years as thepresident of Toyota Watanabe was replaced by Akio Toyoda, the grandson of the founder of Toyota.

Several safety firms have reported that over 2,000 incidents of sudden acceleration involving cars made by Toyota and at least six casualties were also reported. 

Other than the recall, Toyota is still the top manufacturer and seller of green technology in cars, namely the Prius.