Toyota Case Study

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Toyota experienced between 2009 and 2011, 3 separate but related recalls of automobiles, the first recall, on November 2, 2009 was to correct an incursion between the floor mat and the acceleration pedal which can cause pedal entrapment, the second one, on January 21, 2010 incurred because some crashes were not linked to the entrapment of the floor mat Toyota referred to this issue as Sticking Acceleration Pedal that causes unintended acceleration. Toyota also issued a separate recall for hybrid anti-lock brake software in February 2010. The whole recall operation made by Toyota have resulted in a worldwide recall of 9 million cars, sales of the models related to the recall have been frozen for several weeks and the company had to face numerous lawsuits from its customers. These defects have caused tragic accidents but also the most challenging crisis in Toyota’s history, the iconic brand usually synonymous to safety and quality has lost its reputation very quickly and has been pointed out as unreliable, it was even exaggerated, press and public have been convinced that the cars had electronic problems and that the company was hiding this from the public. The root of the crisis and its effects: Recall in the car industry happens all the time in the automobile sector, but in this case of 9 million recalls, linked to unintended acceleration problems the crisis involves serious consequences since it’s calling into question the most valuable feature of a car : the security of the driver. The crisis was definitely a disaster, repairing costs, market shares dropped down extensively, production was suspended, they had to pay civil penalties, and had to pay for the troubles caused to its customers, but another impact of this crisis was on the intangible assets - its brand image and reputation of quality that the company was building since its foundation in 1937.

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