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Can Toyota Ride Out Pedal Recall Fallout?

The Toyota logo is displayed on the grill of brand new Toyota RAV4s on the sales lot at City Toyota in Daly City, California.
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The Toyota logo is displayed on the grill of brand new Toyota RAV4s on the sales lot at City Toyota in Daly City, California.

On the surface, Toyota's latest recall related to unintended accelerationis the kind of scenario that could sink a company. 2.3 million vehicles recalled just weeks after the company recalled 4.2 million vehicles (1.7 Million are covered by both safety alerts) means a high percentage of the cars and trucks Toyota has sold in recent years are now in question. Add to that some high profile examples of deadly accidents that may be linked to gas pedals getting stuck and you can see why this is a worrisome situation. Toyota built its business on delivering industry leading safety and reliability.

Now both are being questioned.

Toyota has said it will change out the gas pedal on millions of models in question and install a brake over-ride system in all of its cars. Appropriate steps for sure. What Toyota will have a tougher time fixing is the damage to its reputation and ultimately how that will impact sales. No one is quite sure how that will shake out, but Ford and Audi have been down a similar road in the past and found out first hand how much these situations can hurt business.

Audi dealt with questions about unintended acceleration 20 years ago and fought back against claims Audi's were dangerous. Ultimately, Audi was vindicated, but in the process its reputation took a serious hit and its business in the U.S. suffered. Ford went through a similar experience a few years back with the Explorer/Firestone controversy. It wound up being a textbook case of how not to handle a safety recall. Ford and Firestone pointed fingers at each other, couldn't agree on how to handle questions from the press, and in the end made a bad situation worse. The fallout at Ford was extensive. Its quality reputation took a huge hit, and the Explorer went from being a huge asset to a huge problem.

It's too early to know say if Toyota can ride out these recalls better than Ford and Audi.

It helps Toyota that it’s built up a considerable amount of good will with Americans over the last 50 years.

And by coming out and installing a brake over-ride system on all models, Toyota is sending a signal to the public that it is taking steps to correct any real or perceived issues with its gas pedals.

Still, it will be several months before we know if these recalls keep people out of Toyota showrooms.

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