Toyota Ruling Gives Brand Rare Sigh of Relief

Posted by Dale Buss on February 8, 2011 04:30 PM

Maybe now, finally, Toyota can get back to brand-building.

The relief must have been palpable at the company’s American headquarters in southern California after today’s news that the U.S government found electronics didn’t play a role in any of Toyota’s safety-related problems of last year.

The joint announcement from NASA and the National Highway Traffic Safety Administration (NHTSA) means that Toyota was right in saying that its engineering flaws were restricted to mechanical failures that it already diagnosed — and driver error.

It also means that Toyota’s word could be trusted that it had gotten to the bottom of the problems, that electronics and software didn’t play a role, and that it was making sure they couldn’t happen again. It also means it can get back to business.

While the company still faces potentially billions of dollars in legal judgments from lawsuits over a handful of deaths and the accidents that stemmed from the problems it admitted to, the announcement means that Toyota finally can get back to rebuilding its future with confidence.

It’s intriguing what has happened to Toyota’s brand reputation in the last year or so. Its ownership base, initially horrified that tried-and-true Toyota could have made such huge mistakes, largely has come back home, as Toyota executives repeatedly have said over the last few months.

The brand issued the following response to today's news:

Toyota welcomes the findings of NASA and NHTSA regarding our Electronic Throttle Control System with intelligence (ETCS-i) and we appreciate the thoroughness of their review.  We believe this rigorous scientific analysis by some of America's foremost engineers should further reinforce confidence in the safety of Toyota and Lexus vehicles.  We hope this important study will help put to rest unsupported speculation about Toyota's ETCS-i, which is well-designed and well-tested to ensure that a real world, un-commanded acceleration of the vehicle cannot occur. 

But many doubters remain among non-Toyota owners – those millions of Americans who otherwise at least would have put Toyota models on their shopping lists. That’s the biggest reason Toyota brand managers find themselves this month in the midst of offering sales incentives that are uncomfortably high for their tastes.

And in making strong “conquest” sales once again, the Toyota brand will be handicapped by at least a couple of things. First, its safety problems unfortunately have overlapped with a relative gap in the company’s new-product pipeline. Second, while Toyota has fiddled, nearly all of the competition have stepped things up a notch — meaning that it won’t be nearly as  easy for a still-damaged Toyota brand to wrench sales away from rivals.

Still, today is a red-letter one for Toyota. And a reason to believe there will be more.

Here's a look back at its "Safety First" campaign at the height of its safety crisis last year:

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