With six months of autosales on the books for 2012, Toyota Motor Company appears to be on pace to take back the crown as the world’s largest automaker. Some are already proclaiming it to be so, despite another half-year of sales yet to be determined. The last few years have been tough for the Japanese automaker thanks to a spate of recalls and natural disasters.
Let’s take a look at the issues that Toyota seems to have finally overcome.
Recalls, Recalls, Recalls
Most of the Toyota recalls centered around unintended acceleration, meaning that the car could accelerate without input from its driver. The Toyota recalls actually date back to 2007, when the company announced they were recalling approximately 55,000 Toyota Camry and Lexus ES350 models that were delivered with optional “all weather” floor mats. The floor mats could entrap the accelerator pedal and cause the Camry and ES350 to accelerate uncontrollably.
But it was a fatal collision in 2009 involving a Lexus ES 350 loaner car improperly fitted with floor mats from a Lexus RX 400h SUV in August 2009 that got the ball rolling on the seemingly unending recalls. The National Highway Traffic Safety Administration (NHTSA) conducted a safety investigation relating to that collision. The crash involved an off-duty California Highway Patrol (CHP) officer with nearly 20 years on the job.
A 911 call was placed, believed to be from the CHP officer’s wife, indicating the accelerator pedal in the car she and three others were traveling in was stuck and the Lexus had exceeded 100 miles per hour. The Lexus ES350 struck a Ford Explorer and was airborne for nearly 150 feet before it crashed into the San Diego river. All four occupants were killed as a result.
Toyota issued a voluntary recall of 13 different models ranging from 2004 to 2010 model years in November 2009. Some 3.8 million vehicles were affected, and in the interim, Toyota asked owners to remove the floor mats and not replace them. Later in the month, Toyota amended the recall and noted that they’d replace the floor mats and have dealerships perform a reconfiguration of the accelerator pedals and install a brake override system, also known as a Brake-Throttle Override (BTO) system.
While Toyota initially described the issue as only related to floor mats, they announced yet another recall in January 2010, this time focusing on the accelerator pedals. 2.3 million vehicles were involved in the United States, and unlike the previous recalls, this one also included nearly 2 million automobiles sold in Europe and China. Eight more recalls were announced through the end of 2011.
In the end, NHTSA largely cleared Toyota, although they noted issues with sticky gas pedals and floor mat entrapment of the pedals. NHTSA concluded that the vast majority of incidents involving Toyota models were caused by driver error – pedal misapplication in this case – and not because of any of the mechanical issues Toyota addressed in the multiple recalls. NHTSA even called in NASA scientists to offer expertise in the investigation.
Two Natural Disasters Strike a Blow
While the massive recalls may have dinged Toyota’s reputation with the public, much of their loss of sales came from two natural disasters that took place in 2011. In the spring of 2011, an earthquake in Japan and the resulting tsunami left the Toyota supply chain in shatters, even for automobiles built in the U.S. such as the Camry. Toyota was forced to idle dozens of plants in Japan, which affected the company’s ability to provide dealers with product.
Mother Nature struck another blow in the summer, as flooding in Thailand put further pressures on the automaker’s parts supply. But by September 2011, the automaker announced that production in North America was back to 100 percent. Some models not built in North America remained in short supply as 2012 began, but the automaker recovered quickly and has experienced continued sales growth for the first half of the year.
What’s to Come in the Last Half of 2012?
Toyota, with 4.97 million vehicles sold in the first six months of 2012 has a lead of 300,000 automobiles over General Motors (GM) which says it sold 4.67 million through June 30. It also extended it’s lead over third place Volkswagen to more than half-a-million vehicles. Toyota says it expects to sell 9.58 million for the year. But there’s no guarantee it’ll be able to keep its lead over GM.
“Keep in mind Toyota’s sales may be stronger in the first half of 2012 than the second half because they are still recovering from the impact of the tsunami last year and re- stocking dealerships, pulling in consumers who may have waited,” Rebecca Lindland, an industry analyst with IHS Automotive, told Bloomberg Business. “But that positive impact will trail off as the year progresses.”
Toyota’s U.S. sales for June 2012 were up more than 60 percent year-over-year. “We expect to see continued stability in the automotive market during the second half of 2012 thanks to pent-up demand, low interest rates and a continued influx of new products,” said Bob Carter, Toyota Division group vice president and general manager, Toyota Motor Sales, U.S.A.
For its part, GM says that more than 70 percent of its models will undergo redesigns between now and 2013. No matter what company ends up as the largest automaker at the end of 2012, it’s an exciting time to observe the industry and the products available to consumers.