Toyota recall: Did rapid growth hurt the carmaker's quality?
In 2002, Fujio Cho, then president of Toyota, announced Global Vision 2010 鈥� Toyota鈥檚 ambitious goal to capture 15 percent of the global auto market and become the No. 1 carmaker in the world by this year.
The company has achieved part of that goal. Although it hasn鈥檛 captured 15 percent of global market share, Toyota surpassed General Motors two years ago to become the world鈥檚 largest carmaker.
But, as Toyota鈥檚 recalls and sales suspensions spread across the globe, some consumers are asking, at what cost? Did Toyota鈥檚 drive for rapid expansion cost the carmaker its reputation for quality?
鈥淚t鈥檚 obvious that they were looking at incredible expansion,鈥� says Aaron Bragman, research analyst at IHS Global Insight. 鈥淭hey were pursuing growth at the expense of quality. And now Toyota is paying a price for it.鈥�
Another former Toyota president, Katsuaki Watanabe (who is now vice chairman), acknowledged these issues well before now. In a 2008 speech to Japan鈥檚 National Press Club, he said that Toyota was falling victim to 鈥渂ig company disease鈥� 鈥� arrogance and complacency brought on by the car company鈥檚 rise to the top.
鈥淭he fact that Toyota is growing globally suddenly shouldn鈥檛 be used as an excuse [for problems],鈥� Mr. Watanabe said, according to the Associated Press.
Toyota鈥檚 very success contributed to some of its failures, some say.
鈥淭hey probably rested on their laurels,鈥� says Michelle Krebs, senior analyst at Edmunds.com. 鈥淭oyota has been the favored child for a long time. Now, all of a sudden, they鈥檙e just like the rest of the auto companies: They make mistakes.鈥�
Toyota鈥檚 global growth 鈥� its worldwide sales went from 6.17 million units in 2002 to an expected 8.27 million this year 鈥� pressured the automaker鈥檚 resources, Ms. Krebs says.
鈥淲e鈥檝e always wondered if they鈥檝e stretched their resources too thin,鈥� she says. 鈥淓ngineering, marketing, manufacturing 鈥� they鈥檙e doing a lot more with the same amount of people.鈥�
That drive for efficiency may have led Toyota to cut corners, she says.
鈥淭hey鈥檙e just like everybody else, finding ways to trim costs. Perhaps something gets overlooked, or they鈥檙e not testing completely. We don鈥檛 know yet.鈥�
Outsourcing may have also played a part in the carmaker鈥檚 problems.
Toyota used to buy parts from a small group of Japanese suppliers that were longtime partners. But, like almost all automakers, Toyota more recently has outsourced much of its manufacturing and production.
The recalled accelerator pedals were produced in a firm based in Elkhart, Ind. 鈥� CTS Corp. So far, pedals made by Toyota鈥檚 original manufacturer, Japanese firm Denso Corp., have not had problems.
As part of it drive for growth, Toyota also began putting common components in multiple vehicle models. Component sharing is a common practice in the competitive, cost-conscious auto industry.
鈥淭hey鈥檙e doing a lot of economizing by sharing architecture across the globe,鈥� Krebs says. 鈥淲hen something goes wrong, it can be huge, which we鈥檙e seeing now.鈥�
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