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Toyota Slips Into Icy Spotlight
Toyota Motor Corporation, which has drawn more media attention than it needs lately, will remain in an unfriendly spotlight for a while as the Japanese automaker tries to fix its various car problems and regain customer confidence over the coming years. Since Toyota's quality problems and its mishandling of them started making headlines last fall, it has recalled millions of vehicles, including its top-selling hybrid brand, Prius. This is a significant development not only because Toyota, a symbol of Corporate Japan whose "made-in-Japan" label is recognized globally for its quality assurance, has lost its credibility overnight but also because the recalls demonstrate a major turning point for the auto industry as a whole.In a recent opinion piece, a Japanese analyst pointed out that the car industry, which fairly recently began producing environmentally-friendly hybrid cars on a large scale, is about to experience "a revolution" for the first time as it embarks on an even more ambitious project to develop electric cars. According to the analyst, the attempted transformation will allow "electric appliance manufacturers such as Panasonic and Sony" to compete in the automobile market. He also stated that heavy use of computers to control accelerators, brakes and other functions of the industry's newest models has made it increasingly difficult for mechanical engineers to detect quickly the real causes of problems, and quoted a senior Toyota executive as saying, "Automobiles are no longer a combination of hardware, but software."
Another analyst speculated that Toyota's problems stem from failures of control-unit software caused by design defects in the Engine Control Unit (ECU) or manufacturing defects in semiconductor chips, a common headache shared by numerous other manufacturers. If the ECU turns out to be the culprit, he said, it is highly likely that Toyota either lacked a "chief engineer" responsible for overall design, or the company's production process was dysfunctional. Claiming that Toyota's globally-touted "kaizen" quality-improvement effort has peaked and its management can no longer keep up with technological progress, he suggested the company conduct a thorough review of its overall approach.
As Toyota President and CEO Akio Toyoda visits the US this week to testify before Congress, many will be watching closely to try to figure out what happened to the world's largest car manufacturer - and more importantly, what will happen to it. This is a critical time for Toyoda and his company, but it is also a grand opportunity for him to explain to the entire world how he will rebuild the proud company and repair its reputation. Whether Toyota can continue to lead the global auto industry, as well as Corporate Japan, hinges on the leadership of Toyoda, the 53-year-old grandson of Toyota founder Kiichiro Toyoda.
Atsushi Yuzawa
The views and opinions expressed in this blog post are those of the author(s) and do not necessarily reflect the official opinion or position of Concepts & Strategies, Inc.
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