Changes in brand image of Toyota

Toyota is one of the top car brands from Japan. They have been one of the biggest automakers in the world. They have been producing automobile for the past 60 years. They have put their brand in the spotlight and they have achieved the consumers trust on their products and brand. Toyota has been profitable from their first creation. Their brand has been well known and used by consumers worldwide. Their quality of product has never disappointed their customers. “Their brand image has been built on the safety and reliability of their cars.”

2.0 Brakes Malfunction and Sticky Pedal Accelerators

In the previous years, Toyota has encountered issues that are similar to year 2009 but in year 2009 they have to announce to their stakeholders that they are calling a major call back on their new hybrid cars Toyota Prius. It is a fully hybrid electric medium build car that has good qualities as it is environmental friendly but it has a big problem. The problems are that the car brakes failed to work the accelerator pedals got stuck. “Toyota’s taking a huge hit at the moment in terms of their brand image,” Mr. Champion said.

In January, the problems of sticky accelerator pedals reached almost to 4.5 million vehicles and in November, as many as 5.5 million vehicles with accelerator pedals that could become trapped by the floor mat were called back. Toyota Prius have started been sold in the year 2004 throughout year 2009. These model years are affected by these problems of brake malfunction and the sticky accelerator issue.

Toyota has also made a mistake to their stakeholders by not responding to the issue soon enough before the news spreads out to the public. Their Board of Directors should have take action before more complaints are filed.

2.1 Employees

The employees that are affected by this issue are the one responsible for assembling and installing the brakes to the vehicle. Their quality check department employees are to be blamed in this matter due to their careless checking. The repairing works begin as soon as the shipments of the parts reached the dealerships. Employees will take at least 25 minutes to completing each repair work. One of the service managers Dave Davis says that “It’s going to be chaotic, but we’re doing the best we can. If I have customers until 9 o’clock at night, that’s how late I’ll stay open.” This statement proves that employees have to work long hours to finish up the repair works.

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For the employees that are working in the assembly line, they are under pressured by having to come up with a more dependable fix as soon as possible because the longer they take to find a dependable fix, the longer the assembly line will be idle, the higher the cost of Toyota will be. When the assembly line is idle means that other processes are put on hold, there will be no new car sales probably until Toyota fixes the damaged they have caused to their own company.

2.2 Customers

The customers are the people that affected the most due to this mishap. They are at risk of losing their lives when the breaks of their vehicle fail to function as they should. Toyota was aware of the complaints in Japan about the braking problems on their Prius. In the United States, the complaints on the Prius brakes are building up as well. An accident was reported in Japan, suspected to be linked to the brakes not functioning. According to the Japanese Transport Ministry, the accident injured two people as the Prius they were driving crashed into another car head on. (CBSNews Business)

2.4 Shareholders

Their shareholders are affected by this issue because they have invested in Toyota for the project of the Prius. When this problem arises their stock prices will fall. Their dividends are automatically affected by this issue. Toyota stocks falls drastically in the Tokyo Stock Exchange, falling 5 percent to 3,230 yen ($35) after dropping 5.7 percent the previous day. When the U.S. call backs were announced in the media, 22 percent of their stocks are lost.

3.0 Importance of Dilemmas

After this issue is out in the public, Toyota has admitted to the press that their hybrid car has problems. They have made a major call back of the vehicle globally. As many as 4.5 million units were called back. Toyota is making a decision what any other auto manufacturer would do in this kind of situation. They send out letters to the affected car owners that need to send their vehicle for the call backs. The Toyota’s technicians are working hard and working long hours to deal with the high volume repair jobs that are occurring.

If the Toyota does not realize how important this issue will affect their company, they will have to suspend the sales of the new car of the affected models that are still at their dealers’ lots and the new car production will also be temporarily stopped. They must know that this issue is big.

3.1 Employees

The production plant in Alabama is shutting down for three months in order to cut the inventory levels but no full time workers were let go. Instead, the part time workers were let go and their overtime were cut. During the three months shut down, Toyota came up with a training, cost cutting and improvement plan for their employees.

Jim Bolte the President of a plant in Alabama, United States says that “When we made our initial announcement about our non-production time and told our team members that they would not lose their jobs, we could see that many of them maybe didn’t believe us…”. He also added “Now they know that when we say things we really mean them.” (Reuters)

3.2 Customers

After the occurrence issue, Toyota provides free transportation for their customers in the United States to the dealers for repairs that involved in the call backs. They provide this free transportation to those who refuse to drive their call back vehicle to the dealership and also reimbursement for the Toyota owners. At the dealer, they provide a rental car or a pickup and return car at the dealership. They provide a fast service on the repair works and they also give reimbursement to their dealers for the cost of compliance. (Bloomberg Business Week)

3.3 Shareholders

The Toyota Motor Corporation President Akio Toyoda bowed and apologized to Toyota’s shareholders for causing the biggest global call backs of their vehicles.

It was the first time the president of Toyota faces the shareholders since the company’s reputation was damaged due to the call backs issue. He says that the company is doing their best to improve their quality control and he is thankful to the shareholders for their support. He adds “We believe our most important task is to regain customers’ trust.”

(Autos on msnbc.com)

3.4 Theory

Toyota should know look into the utilitarianism theory. This theory has been used since the eighteenth and nineteenth century philosophy but the idea of this theory is still applicable in the twenty-first century. This theory explains that we should make a decision by considering the consequences of our actions. It means that we should act in ways that produce better out come than the alternative we are considering. In principle it is also known as “maximizing the overall good” or “the greatest good for the greatest number” (Hartman P. L. and DesJardins J. 2008). A decision that fulfils all these terms is the right decision to be made ethically. Therefore, Toyota has to figure out what is the best thing to do for the sake of their stakeholders. Thus, by making the right decision they are able to regain their stakeholders trust towards their company. Toyota can use this theory not just to make decision for their current issues but also they can refer it if there is any issue occurred in the future because it balanced the good over bad for those who are affected (Shaw H. W. and Barry V. 1998).

4.0 Our Principe

Toyota believe that “there’s no best… only better”. They will keep on getting better for the future. That is why they put their brand message ‘Moving Forward’. This message proves how passionate they are for innovation and discovering new ideas and technology. They know that no matter how successful they may get, there will always be new challenges that awaits them in the future. They are focused on the future of the company and their brand. They will not stop pursuing for excellence as they are dedicated to ‘Kaizen’ which means “continuous improvement”. By implementing this in their hearts, they are able to give what their customer values the most out of them which are their quality, durability and reliability of the vehicle that they have produced.

Even though, currently Toyota is facing some issues on their quality and reliability, they still hold strong on what they believe in which is ‘Kaizen’. They are trying their best to regain what they have almost lost from their stakeholders. (Toyota Corporate info)

5.0 Recommendation