Economy

Markets

Industries

Insights

Reports

Events

Toyota recall puts reputation at risk

By Li Fangfang (China Daily)
Updated: 2009-08-25 08:37

Toyota Motor is recalling almost 700,000 vehicles because of a potentially dangerous electric window malfunction. [CFP]

Japan's Toyota Motor Corp's biggest ever recall of vehicles in China, affecting about 688,000 vehicles, is expected to damage its reputation for reliability, analysts said.

The faulty cars have a defect in the electric window system that could cause malfunctions, short circuits or even a fire. The affected vehicles are Guangzhou Toyota's 384,736 Camrys made between May 15, 2006, and December 2008, the most popular models in the medium-sized sedan segment in China, and 22,767 Yaris compact cars made between May 15 and Dec 31, 2009.

The recall also involved another joint venture, FAW Toyota's 35,523 Vios cars produced between Feb 18 and Dec 25, 2008, and 245,288 Corolla models made from May 17, 2007, to Dec 25, 2008, according to a Toyota statement filed with the General Administration of Quality Supervision, Inspection and Quarantine.

"The recall will inevitably hit Toyota hard in the fiercely competitive Chinese market," said an auto analyst who declined to be named. "It will bring bigger losses to Toyota's brand value than the cost of fixing the defective parts. Quality is vital for automakers."

Excessive lubricant was used in the electronic controls, a Toyota spokeswoman said. No injuries have been reported due to the defect.

Owners of the affected cars can contact Toyota from today to get faulty window switches replaced free of charge.

It is the biggest recall by numbers of cars involved in China's auto industry since the recall regulation was instituted in 2004.

The company said the faulty parts originated from one supplier but did not disclose its name. A member of staff at Toyota's customer service call center surnamed Lin said the hotline had been extremely busy the whole day after the news emerged.

Related readings:  Toyota recalls 688,314 cars  Toyota, BMW beat forecasts, but firms remain cautious  Toyota reports $819m quarterly loss  Toyota recalls 259,119 Camry sedans in China

"Most of them are owners of the cars involved," said Lin. "I also received inquiries about other Toyota cars from people wanting to know whether they had the same or other problems."

Toyota recalled 80,000 Vios, Corolla and Yaris vehicles which had faulty manual transmissions in October 2008, and 121,930 Crown, Reiz and Lexus vehicles in December 2008. In April, it recalled 260,000 Camry cars that had defective brakes.

The recalls between 2005 and 2009 came as Toyota boosted expansion and sales. "Obviously, the rapid expansion brought pressure on its quality control system," said the analyst.

Earlier this month, Akio Toyoda, the company's new president, said Toyota would abandon its target of having 15 percent of the global market share in 2010, shifting its focus from sales numbers to quality.

Since the Chinese government implemented the automobile recall regulation, there have been 155 recalls by the end of 2008, involving 1.85 million vehicles.

The impact is expected to be felt in sales.

Wang Li, a 29-year-old technical engineer with Datang Telecom in Beijing, said he would postpone a decision to buy a Toyota Corolla car after hearing the latest news.

"I have to think it over because, in my view, quality is the first consideration in buying a car," he said.