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Recent Impact to Toyota's Business

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Submitted By djcarrion
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Recent news that has impacted Toyota is the vast amounts of recalls to its vehicles that first hit the press in 2009. These recalls were due to a manufacturing issue that could cause the accelerator to stick on the floor mat, causing drivers to lose control of their vehicles. It ended up being the company’s largest U.S. recall, calling for over 3.8 million vehicles to be serviced (AP, 2009). Not long after, in 2010 more recalls were being reported, this time a voluntary recall that included an additional 2.3 million vehicles that were susceptible to “dangerous acceleration” that could lead to a crash (Huffington Post, 2010). These recalls were heavily covered by the U.S. media, maybe even to the point of disaster. ABC even staged a scenario, showing how devastating a certain electrical issue could be on the vehicle’s acceleration. This caused consumer panic, until Toyota demonstrated that the same results could be achieved on Ford, Chrysler, GM, and BMW vehicles. They also went to great lengths to prove that ABC had staged much of the footage to make the problems with Toyota seem worse than they were (Ahrens, 2010). Also, after the recalls hit the media, reports of death due to the issues raised to 37 from 21; many of which were later cleared to have no connection to the recall (Fumento, 2010). All this negative press came at a bad time for Toyota, and it was estimated that each U.S. dealership could lose between $1.75 million and $2 million a month, and between January 25 -29 2010, Toyota shares fell 15%. (Haq, 2010) Changes in society have impacted Toyota as well as other vehicle companies. Since the “green movement” has gained momentum, consumers are interested in purchasing vehicles that are “safe” for the environment. Toyota has three hybrid models available now, the Camry, Prius, and the Highlander. (Toyota, 2011) Toyota has also begun their

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