SOURCE: Industrial Info Resources

Industrial Info Resources

March 03, 2010 05:00 ET

Toyota's Fall From Grace, a "Navigating the Currents of Change" Webcast on Industrialinfo.com

SUGAR LAND, TX--(Marketwire - March 3, 2010) - Researched by Industrial Info Resources (Sugar Land, Texas) -- For decades, Toyota Motor Corporation (NYSE:TM) (Toyota City, Japan) has been the name in quality, reliable automobiles. Toyota used this reputation to reach first place in worldwide sales, finally taking firm control of the top position in 2009, despite claims from the American automakers that their quality had become just as good as that of Toyota. However, Toyota's vaunted reputation has been shattered in recent weeks. The company has taken major damage from its massive recalls and the resulting congressional hearings caused by faulty braking systems that have sidelined almost every model that Toyota produces, bringing the manufacturing giant's operations to a screeching halt.

Consumer confidence in Toyota as a whole is now shot, and the company's sales have suffered dramatically. In an unprecedented move, Toyota's executive leadership testified before Congress, apologizing not only to lawmakers and the public, but also to Toyota employees for the embarrassing and deadly series of events that have led to the recalls.

Toyota was forced to shutter almost all of the company's production operations as it worked to come up with a solution to the faulty braking systems that have claimed at least 39 lives in recent years. While Toyota dealerships are struggling to fix the millions of vehicles affected by the problem, Toyota has determined that every new model that the company produces will include a new brake-override system by the end of the year.

What does this mean for the future of Toyota? The automaker has set itself back at least a decade in terms of customer confidence and sales. Toyota wanted 2010 to be the year that it solidified its first-place position in the automotive world and distanced itself from other automakers in regard to sales. But now sales are suffering greatly, opening the door for General Motors Corporation (GM) (Detroit, Michigan) to grab the No. 1 slot again.

It is going to take at least a year for Toyota to begin recovering from this series of mistakes. The company has already begun a massive ad campaign aimed at reassuring consumers that Toyota does indeed put quality above sales, although the facts do not support these claims. The company will have to continue this campaign for years to come as it struggles to recover the sales that have been lost.

In the meantime, the American automakers have ramped up efforts to take advantage of Toyota's lapses in judgment, offering significant deals on Toyota trade-ins, regardless of the age of the vehicle. Even as GM and The Chrysler Group LLC (Auburn Hills, Michigan) continue to put their own houses in order after their recent bankruptcies, they and Ford Motor Company (NYSE:F) (Dearborn, Michigan) are pulling out all the stops to grab market share from Toyota.

Click here to join David Pickering, Industrial Info's vice president of production research and Industrial Manufacturing Group manager, on this edition of "Navigating the Currents of Change" for an in-depth discussion of Toyota and its recent problems.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy-related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news. For more information send inquiries to industrialmanufacturing@industrialinfo.com or visit us online at www.industrialinfo.com.

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