Autos

Toyota's Reputation Takes 6.4 Million Fresh Dents With Its Latest Sweeping Recall


Toyota Motor’s (TM) longstanding reputation for reliability and assembly line mastery suffered a further wince-inducing dent this morning with a recall of 6.4 million vehicles for five potential hazards. The problems involve seat adjustments, steering columns, and windshield wiper motors on 27 Toyota models dating back to at least 2005.

Recalls happen all the time—a hundred thousand cars here, a couple million there. Just yesterday, in fact, Volkswagen (VOW:GR) recalled 150,201 Passat sedans over potentially faulty headlight bulbs. But the Toyota warning this morning is massive by any measure. Taken in total, the recall number equals almost two of every three vehicles the company made last year (although the suspect models are scattered over many model years).

What’s more, Toyota has been issuing recalls almost as fast as it has been unveiling new models. Today’s mea culpa is its eighth major recall since 2009. Here’s a look at the number of cars the Japanese automaker has been pulling back in for fixes vs. the number of new cars it stamps out.

Since the start of 2009, Toyota has sold 23 million vehicles, not including its Daihatsu and Hino brands, according to Bloomberg data. It has issued recalls on 28 million vehicles in that period.

Granted, some cars may have been recalled more than once. And Toyota says it is being overly cautious, which seems an intelligent tack, given the crisis that stemmed from General Motors’ (GM) tardy reaction to faulty ignition switches.

Meanwhile, Toyota agreed last month to pay $1.2 billion to settle a U.S. criminal probe over manufacturing glitches that led to sudden acceleration in a range of 2009 and 2010 models. In that case, Toyota didn’t recall the cars until after much damage was done. It admitted to having concealed information as part of the settlement.

Toyota sells more vehicles than any other company. Still, fixing 6.4 million cars isn’t cheap, and the company may have to lower prices or raise incentives in the next few months to sway dubious customers. Call it reputation repair.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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Companies Mentioned

  • TM
    (Toyota Motor Corp)
    • $119.43 USD
    • 0.25
    • 0.21%
  • VOW:GR
    (Volkswagen AG)
    • $181.62 EUR
    • 0.43
    • 0.24%
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