Huge car recall will test customer loyalty
Millions of vehicles called in around the world over accelerator problem
Japanese car manufacturer Toyota, well known for its customer loyalty, will find out just just how faithful its customers are after opting to recall eight million cars around the world due to problems with accelerators that jam and cause vehicles to speed up.
In the US Toyota – which is the biggest car maker in the world and was ranked the eighth-most-valuable global brand last year by Interbrand – has indefinitely stopped sales of eight models, including the Camry (the best-selling car in the US) and the Corolla, the practical compact model on which Toyota built its major reputation for quality and reliability.
In addition to the accelerator problems Toyota is also facing a recall of 270,000 of its Prius hybrid cars in the US and Japan due to faulty brakes.
Cars are often recalled for repair by manufacturers, but Toyota’s efforts to address complaints, coming in the wake of its 4.2 million–car recall in November to deal with similar accelerator issues, were described by the automotive website Edmunds.com as unprecedented.
Toyota says the move is to keep the confidence and ensure the safety of its customers while tests are carried out to fix the problems.
In the UK the company opted to use YouTube to post an apology to customers by senior executive Jon Williams after admitting that the recall could take weeks. The total recall of vehicles around the world is predicted to cost Toyota around US$2bn.
Some analysts compared Toyota’s decision to suspend sales of several popular models to Johnson & Johnson’s 1982 decision to remove packs of its Tylenol medicine from sale after poison was found to have been put in some. Though sales of the drug initially fell dramatically Johnson & Johnson was praised for its swift reaction to the problem.
The car industry, however, is more competitive and deals with much more expensive items.
Despite its strong levels of customer loyalty built up over many years, Toyota is likely to need to invest a lot in advertising and incentives to reboot it sales after the accelerator problems are solved. Analysts have also been advising the company to make public everything it knows about the problems and show it accepts responsibility.
Around 30 lawsuits have so far been filed against the manufacturer in the US and Canada over accidents allegedly caused by “unintended acceleration” incidents. One family of three in the US was killed, apparently in a crash caused by the accelerator sticking down. A recording of a phone call they made was released in the media.
Some industry analysts say Toyota has underlying problems with the software used in its cars’ computer control systems that may not be simple to fix.
Ten things Toyota ought to do
UK PR company McCann Erickson Birmingham has said there are ten things Toyota should do in its crisis management of the situation:
1. Clarify that Lexus is not part of the Toyota model recall, but confirm that a thorough investigation into the individual case is underway as part of the company’s ongoing commitment to the safety of its customers.
2. Divert attention to the current Toyota model recall and the safety measures Toyota is taking.
3. Monitor online chatter closely, responding to concerned consumers and inaccurate comments, and ultimately steering traffic to the official Toyota recall website for accurate advice and information about Toyota models that are affected by the recall.
4. Make full use of social media to keep the flow of information to consumers up to date.
5. Ensure that messages and any ‘fix’ strategies are consistent across all markets to avoid confusion amongst consumers – the internet as an instant messaging environment is not conducive to separate market strategies
6. Keep dealers and their staff, and customer services call centre operators, fully updated with latest developments – as the first port-of-call for many consumers, their knowledge and loyalty in the weeks and months to come will be key.
7. Have spokespeople in each key market briefed and media trained – early preparation will be key.
8. Remove from the Toyota recall website any links to old and now inaccurate blog postings – one link refers to the RAV4 model being part of the Toyota recall, which it clearly now isn’t. Consumers will be looking for consistent information about which models are and aren’t affected by the recall – the seed of doubt will be sown if conflicting information is readily available.
9. Be sensitive about the content of all Toyota and Lexus communication over the coming weeks – a statement referring to the 2009 sales success of two Toyota models affected by the 2010 recall makes for an uncomfortable read and Lexus ads aired on US TV have been deemed as distasteful.
10. Monitor and share media coverage and online conversations between each market’s crisis teams via regular conference calls – this enables the monitoring of the increase or decline in column inches, and the sentiment of content so that PR strategies and messages can be developed on a daily, or if necessary hourly, basis.