Rough Patches Behind It, Toyota Tries To Accelerate
Paul Schubert and his wife decided to buy a new car last summer — a really fuel-efficient one. After a lot of research, they settled on a Toyota Prius. But there was a problem: They couldn't find one.
The tsunami that devastated Japan in March had dried up supplies of the Prius, which is made in Japan, and a dealer told them they would have to wait — "about four months," Schubert says. "And we thought, well, it'd be, probably, end of November, early December before we were going to have a car."
The Schuberts still had a working car.
"Did we want a Toyota badly enough that we were willing to wait?" Schubert asks.
They did. Their new red Prius now sits in the driveway, with a license plate that reads "LTLSIPR."
But some customers didn't wait. They bought cars from Hyundai, Kia, Nissan or Ford instead.
The tsunami couldn't have come at a worse time for Toyota. The company was finally recovering from the year's previous crisis — a massive recall to correct a risk of unintended acceleration.
Retiree Jan Alford already had a Prius. And she loved it. But it was causing a little trouble at home.
"My husband was reminding me every time I left the house that I might be unsafe," she says.
Then, U.S. Transportation Secretary Ray LaHood chimed in.
"My advice," LaHood said in February 2010, after the acceleration problems surfaced, "is if anybody owns one of these vehicles, stop driving it."
Alford's kids were worried about her, so she sold the car. She and her husband now own one car, and it's not a Toyota.
A Rough Patch For Dealers
Meanwhile, dealers were busy.
"You can imagine what our customers, the phone calls, our phones lit up — it was just unbelievable," says Bob Page, who owns Page Toyota in Southfield, Mich.
Three things caused the incidents of unintended acceleration: loose floor mats, sticky gas pedals and human error — hitting the gas instead of the brake. But Page says the recalls took a toll.
"The fence-sitters — the customers, the ones who had not committed yet to one product or another — we lost a number of those," Page says.
Before the recalls, Toyota's market share in the U.S. was 17 percent, nipping at General Motors' heels. Now it's about 14 percent.
"The jury's still out on whether there will be no long-term consequences," says Rebecca Lindland with IHS Automotive.
To add to Toyota's troubles, some of its cars look a little bland these days compared with competitors. And Lindland says the strong yen has made it more expensive to export from Japan.
"They cut corners, and it showed — and they cut corners at a time when other manufacturers were really going in the opposite direction," Lindland says.
Still In The Black
But these problems don't mean Toyota is weak. The company posted a profit during its darkest time. And it still reigns supreme in reliability. Of the 10 most reliable cars in the latest survey from J.D. Power, five are Toyotas.
Then there's the Prius. Thomas Lhamon just bought the new "Prius c" model from a local dealer.
"They had this car in stock. I went in an hour later and bought it the same day," Lhamon says. And with gasoline prices going up, he has no particular worries. "So far, I've been getting a little over 50 miles per gallon," Lhamon says.
The new Prius models are just two of the 19 new or refreshed vehicles Toyota will introduce this year. The company hopes that will get it some second looks from former customers — and first looks from new ones.
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