Background of Toyota
Toyota came into existence in 1924. Over time, the company evolved to include several other areas of business practices. The auto-mobile section of Toyota has immensely grown to produce numerous models of Toyota vehicles. By now, Toyota have become the most profitable automobile enterprise in the world. It has been facilitated by its global geographic structure, which has subsidiaries and plants all over the world. The organisation also has the potential to influence its products and services (Toyota-global.com, 2014). Examples of automobile firms that compete with Toyota are Audi, Mercedes-Benz and Honda. With the current United States economy in downfall and yet to make recovery profitability of the Toyota, American division is on a declining trend. Economic crisis in the U.S. has decreased the purchasing power of the American public. Such scenario makes it difficult for Toyota, along with their competitors, to survive in the current business world (Toyota-global.com. 2014).
Toyota commands respect among the car users for their quality products. However, these products have sometimes been presented with some shortcomings. As a result, the company has been involved in the car recalls to solve the apparent problems. For example, it recalled 200000 cars in the 2011-2012 year. This event was aimed at rectifying the labelling errors. In 2014, Toyota has recalled 370000 Sienna minivans. The 2014 recall affects the cars sold in the cold regions of the US where salt is used to clear off the roads from ice. Salt causes corrosion of the parts under the vehicle (CTVNews, 2014). As a result, the spare tire falls off causing potential dangers on the roads. The recall campaign was caused by a number of reported incidences of the tires falling off the car.
Objectives of Toyota Recalls
The recalling of the 370000 minivans, for example, is aimed at meeting different objectives regarding the company’s image. The first goal is to make better installation of the splash protector and avoid corrosion of the parts under the car. Once splash protector is installed the spare tire will not fall. As a result, the image of Toyota Sienna minivans will be restored. Accidents, also, would be prevented. The second goal of the recall campaign is to reach all the owners of the car in the cold areas of the USA (Lobosco, 2014). This objective targets at reaching the cars which were manufactured between 2004 and 2011. The cold regions of the USA are ice covered and salt is used to keep the roads clear. The third goal of the recall campaign is to rectify the shortcomings in the Toyota Sienna minivans apparent in the ice covered areas of the USA. The shortcoming affects the brands overall sales negatively. When achieved such objectives would restore the overall image of Toyota. Recalls of vehicles at Toyota comes after the brand is hit by several specific setbacks. As such, different recalls have different specific objectives. However, they all have the same general purpose or goal. This plan is to protect the company’s image, and that of the brand, and to restore its good reputation (Lobosco, 2014).
Recalls Strategy and Execution
In order to restore the company’s image and protect that of different brands Toyota planned to recall the defective cars to the factories. The plan included laying a platform for correctional activities. These activities would see the defective parts of the vehicle replaced with a better one in order to meet the best standards. The goals would be achieved by contacting people who owned the specific car model (CTVNews, 2014). To achieve the goals Toyota used the media to inform the target groups of car users about the recall. This strategy targeted peoplle living in various affected regions in the United States. Regional targeting helped the company to focus on the affected car owners on the globe.
Results of the Recalls
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The recall campaign caused the car owners to return their vehicles for repairs. A large number of the vehicles were repaired and the setbacks were rectified. Although the corrective measure was aimed at making the affected models better it could not happen without negative significance. The negative results of the recall were felt as far as the share market, where the Toyota share fell to 15.8% in 2011, the day the recall was announced. The valuation of the Toyota models also fell, mostly affecting the used car market in the US. Some of these effects, like fall in the price of the shares, did not align with the objectives (CTVNews, 2014). However, the main goal which always have been to protect the image of the company was achieved. It is because the car users continued to view Toyota as a responsible automobile manufacturer. Toyota learned from its 2011 recall that the car manufacturing should consider specific geographical features to be successful. When all geographical and vehicular features are considered the cost of recalls is avoided. Toyota has so far recalled at least 5.3 million cars for repairs and parts replacements. In 2009 alone Toyota recalled 16% of new Toyota Lexus and Scion to repair their accelerators.
Despite the high level of recalls, Toyota appears unaffected by this action. It is because Toyota has maintained a high level of sales even after the 2009 mass recall (CTVNews, 2014). As a result, it has maintained the number one rank in terms of sales since 2008. In fact, the level of sales at Toyota has maintained a sharp increase before and after those recalls. The social media has been of importance in the restoration of the good reputation of Toyota before and after the recalls.