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Toyota's Latest Crisis Shows Lingering Cost of Earlier Mistakes

Toyota Dealership
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Toyota Dealership

With Toyota reportedly on the cusp of another major recall, this time for faulty engines in 170,000 Lexus models worldwide, it's clear this company is far from getting out of the woods.

These guys can talk all they want about making safety and reliability a top priority, but for many car buyers the seeds have doubt have already been planted.

This latest issue with faulty engines will water those seeds of doubt.

These are the lingering costs of Toyota dragging its feet over the last two years when it came to addressing safety complaints. Not only is Toyota being forced to spend billions repairing the gas pedals on millions of cars, that recall, and others, has given Toyota its own "perception gap" with American car buyers. The truth is, there are millions of Toyota models out on the road and in showrooms that are safe and well made. But, after months of stories about faulty pedals, unintended acceleration and other defects that have caused Toyota to suspend the sale of some new models, many buyers have written off even looking at Toyota.

Toyota can talk all it want about research showing that many of its core customers are sticking with the company, but increasingly it's sounding, and looking, a lot like the same act the Big 3 put on for years. For most of the last 30 years, GM, Ford, and Chrysler executives said people still loved and trusted American-made models, even as sales slid. Even as the Big 3 improved quality, sales lagged because of a "perception gap" where the opinions of potential buyers remained negative, despite data showing Big 3 quality improving. The same thing is now happening with Toyota.

Two weeks ago, a colleague who is in the market for a crossover utility vehicle was asking my opinion of various models. When I brought up Toyota, she cut me off and said, "Nope! We are not buying a Toyota." It doesn't matter that she might have loved the Rav-4 and likely would never have had a problem with it. Her mind was made up that she didn't want to buy a crossover that could wind up being recalled. Welcome to the perception gap Toyota.

Every time Toyota recalls a model or models, it re-enforces the idea that this company sold millions of models that buyers will ultimately wind up bringing in to be fixed. Forget whether or not it's a serious safety issue. That's not the point. The point is some potential buyers are worried about buying a headache down the road.

Remember 15 or 20 years ago when a friend would buy a Chevy or Ford truck and you'd think to yourself, "Is this person nuts?" Toyota is not yet to that point with buyers, but the seeds of doubt are definitely there. This company can talk all it wants about spending millions of dollars on safety and improving quality, it won't matter if the recalls keep coming and the perception gap keeps growing.

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