Toyota's Total Recall - Deja Vu, All Over Again?

Just as Toyota seemed to be in the clear again after a couple of years of recovery from major problems, some external and some self-imposed, the brand finds itself back in a thicket of major problems — some from outside and some from inside the company.

The slump in sales in Japan because of a geopolitical spat, and now news of a massive new recall of 7.4 million vehicles by Toyota, have created major speed bumps in the way of Toyota's global sales recovery. After its unintended-acceleration recall fiasco of 2010 and natural disasters that wreaked havoc with its supply chain last year along with smaller recalls, Toyota was forging a smoother path in 2012 with major new models, rising sales, and recaptured market share.

This new recall involves 7.4 million vehicles globally, including 2.5 million cars and light trucks sold in the U.S., due to a potential fire hazard involving power-window switches. The "glitch on a world-wide scale ... evokes the company's much-publicized quality woes of two years ago," the Wall Street Journal noted. That's exactly the kind of assessment, and prospects, that Toyota can't afford right now as it puts together its solid comeback in 2012.

The affected models cut across most of the range of Toyota's high-volume vehicles and affect units sold around the world. It is Toyota's largest recall to date for a single part, though it is second in vehicles affected to the 7.7 million vehicles that Toyoto recalled around the world in 2009 and 2010, targeting floor mats. At least with this recall, Toyota knows of no accidents or deaths stemming from the faulty parts — one advantage over the earlier recall.

Meanwhile, as Japan and China spar over possession of remote islands, sales of Toyotas and other Japanese car brands in China have fallen precipitously. Many Chinese activists are targeting the brands, the cars and even their owners, so consumers are seen as wary of purchasing Japanese-made vehicles these days even if that's what they want to buy.

Toyota is counting on Chinese consumers to come back to its brand once the controversy cools, and many indeed will wait to buy Toyotas, just as many consumers worldwide waited until this year to buy Toyotas after the earthquake and tsunami in Japan, and floods in Thailand, slashed output and distribution of Toyota nameplates last year.

But that's about the only way in which Toyota executives are hoping that history repeats itself.