Opinion of Recall Effects on Toyota's Brand Image/Loyalty

[BIG WORM]

In the News we hear that Toyota is recalling thousands of vehicles because of a major safty issue (i.e. Gas pedal sticking)


How do you think this will effect the following.

a) Price/re-sale value of used Toyata cars now, and in the future

b) The price of new Toyota vehicle

c) Price and demand for other cars

Toyota continues to stay on top in worldwide sales, and customer satisfaction, and I believe that it's a good marketing strategy to keep the "satisfaction" title going by being so open about the recall. However, how does it affect brand image, are they the source of their now chaos with customer panic?

Ford went openly public with many of it's recalls do you think it contributed to their declining sales? When my e46 had a recall I got a piece of paper in the mail saying so, other than that I saw it on e46fanatics, but never broadcast all over the TV, and newspapers. To the average person/e46 owner, I imagine the mail was the first time they've heard of a recall.

Toyota First issued a recall in 09/2009 they said it was a "faulty floor mat that may cause improper/mis-intended use of the gas pedal, 4 months later they call for worldwide recall on the gas pedals, even pulling new cars off the lots, and stopping sales.

...and I know you guys say the guy drive his new truck through the showroom at a local dealership in Atlanta the other day, all because of a "faulty pedal" lol

Is it really the big deal they've made it out to be? Or it just something that affected 1 out of 500 cars and Toyota made it a big deal?

Discuss if interested.

[green91]

The entire thing has been grossly blown out of proportion.

At this time there are two recalls.

One is for modifying the gas pedals to reduce its length and not allow floor mats to get hung. This could be avoided if customers used the clips that came with the floor mats to affix them to the carpet.

The second recall is for the accelerator pedal assembly. The dealers are basically adding a shim behind the spring. The pedal would have had to have been depressed 100% and then if it were to act up, it would have hung wide open sitll with your foot off the pedal. So anyone who has had a issue was obviously flooring it prior to the incident.

The amount of vehicles affected by these conditions are very small, most people IMO are crying wolf.

Toyota will definitely take a hit for this, sales are already seeing it as well as their stocks

[ISAtlanta300]

^^^ THIS.

Pretty much sums it up. Everybody is now suddenly 'feeling' their car accelerate. Placebo effect IMO.

Not to say that there may not be faulty vehicles out there. But the chance of this affecting you is very small.

What is more, car and driver recently did a test on stuck accelerators on Camry's and even at 120 MPH, the brakes were powerful enough to bring the car to a stop or reasonable speed to regain control / take action (i.e. shutting the car off), and to make any accident a low speed issue. Read again: Most brakes are powerful enough to overcome an engine at full throttle, in this case, all 268HP on the Camry.

Of course the media loves a good 'roast' of a Japanese automaker, especially since the current automobile economy is in the shitter.

My bet is that those unaffected Toyota owners will continue to buy Toyota's. Those affected who raise a stink may be swayed with car washes and free oil changes and a very small percentages may abandon the brand altogether.

[BIG WORM]

this was all part of an assignment in my Econ class, this was my response.

a) The price used Toyota's involved in the recall will have a slight decline in retail value for awhile, until this blows over, however "older" model- used Toyota's not affected by the recall; values will remain the same. I also believe that Blue Book values [NADA, Kelly Blue Book] will stay relatively the same; declining slightly, then holding. Just because people may be more hesitant to pay that price, doesn't mean it's not worth it.

b) The price of a new Toyota will also stay close to the same. Remember, dealers purchase the vehicles direct [from Toyota], then sell to the public. The cost of production for Toyota to build a vehicle is not going to decline, therefore nor will its price. However, Toyota will experience a decline in sales, forcing the dealers to lower the price, offer incentives, and even loose money on the deal, just to unload current inventory; which may mean a drop in price [From the dealer, not Toyota] for the consumer.

c) Since only the Toyota's manufactured in North America were involved, [Japanese built Toyota's, nor Lexus, and Scion were recalled] mostly, only the U.S. and Canada will be affected. But since the cost of production for a manufacturer to assemble a vehicle doesn't go down, the competitors MSRP price won't either. However, what you will see is competitors eager to market Toyota's misfortune to benefit themselves. [e.g. GM remained at the top of worldwide vehicle sales for years, and would like to achieve that title again] I wouldn't be surprised if other car company's market their vehicles in a more completive manner, offering lower incentives such as: lower interest rates, warranties, services packages, and increasing the demand for "Toyota alternatives." But I don't expect the MSRP to decline at all.

[BanginJimmy]

The amount of vehicles affected by these conditions are very small, most people IMO are crying wolf.

Its the 6th largest recall in US history, I wouldnt exactly call it small. As of right now there are over 4.5mil vehicles recalled in the US alone and more than 9 million worldwide.



c) Since only the Toyota's manufactured in North America were involved, [Japanese built Toyota's, nor Lexus, and Scion were recalled] mostly, only the U.S. and Canada will be affected.


You need to double check your sources on this, unless you are only speaking about the accelerator issues. The Prius hasnt been officially recalled yet, but it soon will be because of faulty brakes. That recall will affect vehicles worldwide.

[green91]

Its the 6th largest recall in US history, I wouldnt exactly call it small. As of right now there are over 4.5mil vehicles recalled in the US alone and more than 9 million worldwide.




You need to double check your sources on this, unless you are only speaking about the accelerator issues. The Prius hasnt been officially recalled yet, but it soon will be because of faulty brakes. That recall will affect vehicles worldwide.

By small sample i mean actual complaints (prior to recall) of the problem.

[ISAtlanta300]

this was all part of an assignment in my Econ class, this was my response.

b) The price of a new Toyota will also stay close to the same. Remember, dealers purchase the vehicles direct [from Toyota], then sell to the public. The cost of production for Toyota to build a vehicle is not going to decline, therefore nor will its price. However, Toyota will experience a decline in sales, forcing the dealers to lower the price, offer incentives, and even loose money on the deal, just to unload current inventory; which may mean a drop in price [From the dealer, not Toyota] for the consumer.
.

They already hinted at this on the news..... if you are in the market for a new Toyota, soon will be a good time to buy.....dealers will be willing to heavily discount in order to move inventory....

[Julio]

The media is having a field day with this.. oh yes.

[BanginJimmy]

The media is having a field day with this.. oh yes.

Media does this any time they can catch a major corporation with the pants down. Remember the firestorm of media attention Ford got with the Exploder? That wasnt even a part that Ford had any quality control in and they still took the hit, not firestone. From what I read though, Firestone paid the vast majority of the costs for the recall.

[BanginJimmy]

By small sample i mean actual complaints (prior to recall) of the problem.

Thats typically the case with any recall.

[Balls]

the prius is also not the only one affexcted by the "faulty" brakes...and it is currently only the 2010 models in this recall.. Ford is also recalling their hybrids for the exact same issue

But as for the accelerator pedal problems for all the other 8 models being recalled, you also have to look at this as a voluntary recall made by toyota. They know nothing is wrong with their cars, but to please the public, press, and government they are takin action to keep the name safe and on top.

[DVSRX-7]

Toyota workers are slacking