According to a May 26, 2010 Bank of America Merrill Lynch Car Wars 2011-2014 study, Toyota’s U.S. market share has fallen from approximately 17 percent in 2009 to 2010 YTD market share of 15.4%. Subsequent to the report’s publication, the company has suffered a spate of bad news:
- Today, Toyota publicized a worldwide recall of about “480,000 vehicles world-wide, mostly Avalon sedans in the U.S., for steering-system flaws that could develop over time and led to a loss of control.” (WSJ, July 29, 2010).
- On July 1, 2010, Toyota recalled 270,000 vehicles worldwide, including the luxury Lexus brand, as a result of faulty engines due to a valve spring defect, which could cause the engines to stall. (WSJ, July 1, 2010)
- On June 26, 2010, 17,000 Lexus Sedans were recalled after the vehicles spilled fuel during a crash test. (WSJ, June 26, 2010)
- Finally, as reported in the Wall Street Journal on June 18, 2010, Toyota suffered a dramatic drop in the J.D. Powers & Associates 2010 annual initial quality survey, falling to 21st place from 7th the year before. Previously a perennial leader in the survey results, overall “Toyota was rated below average.”
In my opinion, the continuous barrage of recalls—on top of the 8 million Toyota’s that were recalled earlier in the year due to gas pedal issues—is beginning to take a toll on the brand.
A Row of Small Lexus SUVs
In order to draw consumers’ attention away from the company’s problems over the past six months, Toyota is rolling out a new ad campaign, using the tag line “Everyone deserves to be safe.” This new initiative is intended to tout the company’s advanced safety features.
Will Toyota’s new ad campaign be able to overcome the negative publicity associated with the frequent reports of recalls? What does the future hold for brand Toyota?
