Toyota’s Future in America

Toyota is testing the premise that you shouldn’t care what people write about you as long as they spell your name correctly.

The general media has consistently spelled “Toyota” correctly during the current spree of reporting on the giant car manufacturer’s problems, and there are those in the industry who say that is all they have got right. 

Meanwhile, auto industry insiders and consumers are asking what will happen to Toyota next: Are U.S. government regulators really out to get the Japanese company as many in Japan believe because of the Obama administration’s ties to the United Auto Workers union and its support of GM and Chrysler bailouts? Has Toyota’s vaunted quality system suddenly gone terribly awry?

Interestingly, individual American car buyers don’t seem all that much concerned by the “crisis.” Despite a deluge of negative publicity about the Japanese brand, March sales results demonstrated that a substantial number of consumers believe that Toyota brand vehicles offer just the kind of excellent value they’d like to put their money behind. Of course, that value story has been enhanced by a round of incentives never seen on Toyotas, but experts would submit that the chance to get a 0 percent financing deal would not trump the safety of one’s family if consumers truly believed there was a credible threat to that safety. Again, despite the hysteria fueled by an inflammatory press, consumers have apparently realized that there is far more smoke than fire in the reports of mechanical and electronic gremlins bedeviling Toyotas, and with compelling offers staring them in the face from a brand that is famous for being reticent about using incentives, they have jumped off the couch to buy Toyota vehicles. 

As we write this, it looks like Toyota’s retail market share for March will be about 20 percent, which would outscore its share in January, before the bulk of the unintended acceleration crisis was splattered across the nightly newscasts.

Perhaps the turning point in the crisis came when Toyota took on the claims of Jim Sikes, the motorist who said his Toyota Prius accelerated to speeds of 90 mph against his will. Toyota officials were able to use the vehicle’s “black box” data recorder and other forensic incident-recreation techniques to demonstrate that Sikes’ claims might have been fabricated. That case, plus a similar New York case involving another Prius, has apparently stemmed the tide of public sentiment against the brand. Do the two cases prove beyond a shadow of doubt that none of the cases of alleged unintended acceleration has merit? No, they do not. But consumers have certainly decided now is a good time to buy a Toyota.

What’s going on here? Weren’t people being killed by Toyotas? Well, perhaps some cars were at fault, but Toyota has built a laudable amount of equity and loyalty among the American buying public over the course of the past 30 years. With the addition of eye-catching incentives, that equity tipped the scales in the Japanese brand’s favor. Certainly the deluge of negative publicity had negative effects on Toyota’s brand image, but when push came to shove, the general public has been willing to cut the Japanese brand a break.