Business Day (Johannesburg)

9 February 2010

South Africa: Everything Kept Going Right

editorial

Johannesburg — THE remarkable thing about the Toyota recall drama is not so much that it happened now but that it never happened before.

For years, Toyota has had the reputation of being the most reliable of cars. They may not have been the most exciting or even the most beautiful. But you could trust them. Mechanical faults were not part of the deal.

And so Toyota raced ahead to overtake Ford a couple of years ago to become the world's largest car maker. And it's partly because it is so large, but also because the range of niggly faults is now proving to be so extensive, that so many Toyota vehicles (more than 8-million) have been recalled around the world, with the company losing more than a fifth of its market value over the past couple of weeks.

First it was defective accelerator pedals; then it was floor mats; now it's possible faults with the ABS braking system on the new model Prius.

In SA, Toyota has said it may recall three models, but the move doesn't seem to have caused much panic here so far.

Internationally, the recalls have severely dented the car maker's reputation for reliability, quality - and credibility. And that, in a way, is the issue. One would have expected that the world's largest and most profitable car maker would be subject to more intense scrutiny than any of its competitors.

And it's not that it hadn't had faults earlier. It recalled more than 2-million cars in the US as early as 2005. It received complaints about sticking accelerator pedals as early as 2008. But what Toyota failed to do was to come clean, on its own terms, about all the various faults. Which was why the news of the faults caused such panic and did such dramatic damage to Toyota's reputation, even though the number of accidents, fortunately, has been few.

Fast-growing companies should take note that safety is just as crucial as profit. They will surely note, too, that looking after your brand means going public when you find the fault, and not after the market finds you out.

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