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Toyota Takes Aim At Critics

Counter-offensive comes as company tries to win back customers

By Mark Huffman
ConsumerAffairs.com

March 8, 2010

Toyota • Airbags • Engine Problems • Cruise Control • Cooling System • Safety • Toyota Motor Credit • Avalon • Echo • Prius • Scion • Tacoma • Tundra --- Reviews • 2007 Corolla • 2006 Prius • 2007 Camry --- News • Toyota Recalls Avalons To Correct Steering Defect • U.S. Grand Jury Investigating Toyota • Toyota Considers Yet Another Recall • Toyota Recalls, Halts Sales of Lexus Hybrid • Judge Orders Toyota to Turn Over Internal Documents • Lexus GX 460 Passes Retest • Toyota Recalling Older Sequoia SUVs • Toyota Recalls 2010 Lexus SUVs • Toyota Agrees to Pay Penalty • Toyota Faces Subrogation Action From Insurance Firms • Consumer Reports Calls Lexus SUV Unsafe • Toyota Exec Reportedly Urged Company to 'Come Clean' • Feds Seeks Maximum Civil Penalty Against Toyota • Toyota Faces Class Action Demanding Full Refunds • Toyota Denies Prius Recall is in the Works • Pontiac Vibe Sucked Into Toyota Recall • Toyota Takes Aim At Critics • Consumers Say Sudden Acceleration Problems Nothing New • Consumers Describe Sudden Acceleration Experiences • Some Repaired Toyotas Still Suddenly Accelerating, Owners Claim • Two Toyota Models Earn IIHS Top Safety Pick Award • Experts: Toyota Faces Challenge Winning Back Consumer Confidence • Survey: Toyota Image Slips Among Its Current Customers • New York Toyota Owners to Get Help With Recalled Vehicles • Toyota Memo Bragged About Limiting 2007 Recall • Feds Receive New Toyota Fatality Reports • Toyota Recalls Impact Online Car Shopping • Toyota Plans Incentives, Longer Warranties to Win Back Consumers • Toyota Seeks to Repair Brand As Well As Cars • Toyota Announces Accelerator Pedal Fix • Toyota Suspends Sales of Popular Models Plagued by Sticking Accelerators • Toyota Announces Recall to Fix Runaway Acceleration • Toyota Recalling 110,000 Tundra Pickups • Toyota Raises Prices, Prius Jumps $400 • Quality Auditor Charges Toyota Cover-Up • Toyota Agrees to Oil-Sludge Settlement • Toyota Camry Named "Car of the Year" • Software Glitch Slows Some 2007 Camrys • Is Toyota's Quality Slipping? • Toyota Delays U.S. Sales of New Corolla to Improve Quality • Facing Massive Recalls, Toyota Executives Promise to Do Better • Toyota Recalls Near 800,000 for July • Japanese Probe Recall Delay at Toyota • Toyota Builds More Efficient Gasoline Engines • Toyota Cuts Entry-Level Camry Price, Boosts Luxury Model • Toyota Dons NASCAR Racing Gear • Toyota Sludge

It's been a rough winter for Toyota, with everyone from drivers to members of Congress castigating the carmaker for its series of safety-related recalls. Now, the embattled company may be preparing to strike back at its critics.

Over the weekend the Wall Street Journal reported that Toyota plans a series of public events and statements to blunt the cascading criticism. It has marshaled its own group of experts to discredit a study that traces the sudden acceleration problem to Toyota's electronics systems.

Late last week suspicion once against turned to electronics after scores of Toyota owners, whose cars had been recalled to repair the accelerator pedal, reported additional events of sudden acceleration, suggesting the agreed-upon fix was not the root of the problem.

The company has also gone on the attack against a whistleblower who turned over sensitive Toyota documents to U.S. Congressional investigators. The Journal reports the company has provided reporters with court documents that purport to show the whistleblower was a poor employee and has a history of mental illness.

All of this comes at a time when Toyota has its hands full on the legal front, facing more than 70 suits that are seeking class action status. One of the suits was filed by Beasley Allen, a plaintiffs firm best known for its 2007 on behalf of Vioxx users who suffered a stroke, heart attack, or death. At $4.85 billion, that settlement stands as the largest in U.S. history.

Tough critics

Two critics in Washington may be harder to intimidate. Rep. Henry Waxman (D-CA), Chairman of the House Energy and Commerce Committee, and Rep. Bart Stupak (D-MI), Chairman of the committee's subcommittee on investigations, have sent a letter to Toyota, complaining that the company has yet to show it has fully investigated its electronics system as a possible cause of the sudden acceleration problem, other than insisting that it isn't the cause.

Were the problem to be traced to the vehicles' electronics system, the repair costs could be catastrophic for Toyota. Toyota officials acknowledged getting the lawmakers' letter and said the company would cooperate with the committee.

Toyota is fighting back because the recalls and surrounding publicity have been toxic for sales. In January, Toyota's purchase intent averaged just over 13 percent and then fell to a 9.7 percent low as a result of the recall announcements, according to automotive Web site Edmunds.com.

Money talks

The company has respondedwith a number of aggressive financial incentives that appear to making results. The announcement of zero-percent financing and special lease deals generated nearly a 40 percent spike in purchase intent by visitors to Edmunds.

Slightly later announcements of zero-percent financing by Chrysler and General Motors didn't have the same effect, Edmunds reports. In fact, Chrysler purchase intent decreased from 3.3 percent to 2.9 percent and GM purchase intent rose slightly from 12.6 percent to 12.7 percent.

"Because of the Toyota recall, people have been closely watching the company's moves, and many were ready to take action upon hearing the announcement of this highly-anticipated incentives program," said Edmunds.com Senior Analyst David Tompkins. "Chrysler and GM didn't get quite as much attention for two main reasons: historically - such as in the Keep America Rolling campaign in 2001 - followers never get the same level of attention that the initiators do, and, second, this type of announcement is far more rare for Toyota."

"The Toyota recall saga allowed other automakers to snag some market share, and now Toyota wants it back," said George Kang, Senior Analyst at Edmunds.com. "Despite their ongoing challenges, the company still has plenty of brand strength and consumer confidence."

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