Another Misfortune for Toyota Motor Corporation; recalls 7.4 million vehicles globally

On October 10, 2012, Japan’s Toyota Motor Corp announced to recall more than 7.4 million vehicles globally as their response to a vehicular problem discovered. The action was made voluntarily by the world’s number one car maker for safety purposes as the electric window switches on the driver’s side could release smoke.

The aforementioned malfunction was first reported on September 2008 in the United States, primarily affecting 2.47 million Toyota vehicles in the US, 1.40 million vehicles in China and 1.39 million vehicles in Europe. Some models of Yaris, Vios, Corolla, Matrix, Auris, Camry, RAV4, Highlander, Tundra, Sequoia, xB and xD (made between 2005 and 2010) are included on the recall. This is the biggest single recall since 1996 when Ford pulled 8 million vehicles.

The crown for being the best-selling automaker in the first half year was newly reclaimed, and the company was expecting 9.76 million cars and light trucks to be sold globally this year; Daihatsu and Hino brands are included.

Unfortunately, another recall was made after a series of recalls in 2009 – 2011 involving more than 10 million of its vehicles. The latest recall could inflict mutilation to the company’s reputation.

The company faced several misfortunes since 2008 including the damaged supply chains done by the earthquake and tsunami in Japan and floods in Thailand.

According to Monika Saito (spokeswoman), the process of the power window switch repair is not extensive. Heat-resistant grease will be placed on the switches, or replace them if necessary. Saito added that no accidents, injuries, or deaths reported despite the possibility that the malfunctioning switches could produce smoke.

When asked to provide the cost of the recall and if it would impact the company’s future earnings, Toyota declined to provide details. The senior analyst of BNP Paribas Securities in Tokyo, Koichi Sugimoto, made an estimate instead. According to him, the recall could cost at least 10 billion yen ($128 million).

In Japan, Toyota will be repairing around 459,300 vehicles. Vitz model (produced between 2006 and 2008) will be included on the repair. About 650,000vehicles will be fixed in Australia and Asia, 490,000 in the Middle East, 240,000 in Canada, and 330,000 others in the other areas. Details were provided by Shino Yamada, another spokeswoman for Toyota.

Toyota has been through hardships since 2008, yet the company keeps fighting to regain consumer’s trust. The firm announced a recall to show the world that they value their customers’ safety. On the car owners’ side, however, it would be very inconvenient, knowing their cars are included on the recall. This may serve a lesson for Toyota that a simple oversight can still make a car unsafe and worse, millions of money loss.

Source: RTE