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Toyota Motor Corporation (Japanese: ?????????? Toyota Jid?sha Kabushiki-gaisha?, TYO: 7203), commonly known simply as Toyota, is a multinational corporation headquartered in Japan. At its peak, Toyota employed approximately 320,000 people worldwide. It is the world’s largest automaker by sales.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father’s company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota also owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu and Hino Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, Yamaha Motors, and Mitsubishi Aircraft Corporation. The company includes 522 subsidiaries.

Toyota is headquartered in Toyota City, Aichi and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its division Toyota Financial Services and also builds robots. Toyota Motor Corporation (including Toyota Financial Services) and Toyota Industries form the bulk of the Toyota Group, one of the largest conglomerates in the world.

History of TOYOYA

Vehicles were originally sold under the name “Toyoda” (???), from the family name of the company’s founder, Kiichir? Toyoda. In September 1936, the company ran a public competition to design a new logo. Out of 27,000 entries the winning entry was the three Japanese katakana letters for “Toyoda” in a circle. But Risabur? Toyoda, who had married into the family and was not born with that name, preferred “Toyota” (???) because it took eight brush strokes (a fortuitous number) to write in Japanese, was visually simpler (leaving off the diacritic at the end) and with a voiceless consonant instead of a voiced one (voiced consonants are considered to have a “murky” or “muddy” sound compared to voiceless consonants, which are “clear”). Since “Toyoda” literally means “fertile rice paddies”, changing the name also helped to distance the company from associations with old-fashioned farming. The newly formed word was trademarked and the company was registered in August 1937 as the “Toyota Motor Company”.

1937 1947 1957

But the history of Toyota started in 1933 with the company being a division of Toyoda Automatic Loom Works devoted to the production of automobiles under the direction of the founder’s son, Kiichiro Toyoda. Kiichiro Toyoda had travelled to Europe and the United States in 1929 to investigate automobile production and had begun researching gasoline-powered engines in 1930. Toyoda Automatic Loom Works was encouraged to develop automobile production by the Japanese government, which needed domestic vehicle production partly due to the worldwide money shortage and partly due to the war with China. In 1934, the division produced its first Type A Engine, which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Production of the Model AA passenger car started in 1936. Early vehicles bear a striking resemblance to the Dodge Power Wagon and Chevrolet, with some parts actually interchanging with their American originals.

Although the Toyota Group is best known today for its cars, it is still in the textile business and still makes automatic looms, which are now computerized and electric sewing machines which are available worldwide.

Toyota Motor Co. was established as an independent and separate company in 1937. Although the founding family’s name is Toyoda (??), the company name was changed in order to signify the separation of the founders’ work life from home life, to simplify the pronunciation, and to give the company a happy beginning. Toyota (???) is considered luckier than Toyoda (??) in Japan, where eight is regarded as a lucky number, and eight is the number of strokes it takes to write Toyota in katakana. In Chinese, the company and its vehicles are still referred to by the equivalent characters (simplified Chinese: ??; traditional Chinese: ??; pinyin: f?ng tián), with Chinese reading.

During the Pacific War (World War II) the company was dedicated to truck[citation needed] production for the Imperial Japanese Army. Because of severe shortages in Japan, military trucks were kept as simple as possible. For example, the trucks had only one headlight on the center of the hood. The war ended shortly before a scheduled Allied bombing run on the Toyota factories in Aichi.

Q1: What’s wrong with TOYOTA?

What a difference a year makes! Early in 2009 U.S. auto manufactures were on the brink of financial disaster and foreign automakers like Toyota were the exemplars. Toyota was at the top of the heap as the world’s largest automotive producer, with consistently high marks for engineering and manufacturing a quality, safe and affords product line. Now Toyota is in the middle of a firestorm of it’s own, facing a congressional probe and investigation by the Obama administration.

Reported problems with sticking accelerators, floor mats that trapped pedals, and possible break problems on Toyota’s Prius, the manufacture’s pioneering hybrid, have caused Toyota to issue recalls on approximately 8.5 million vehicles. But compounding the problem for the automotive giant are serious questions on how it dealt with these problems. Government investigators what to know what Toyota knew, when did they know it, and how soon did the manufacturer act. These inquiries into Toyota’s handling of the mechanical problems and the related safety issues came on the heels of criticism from consumer groups. These groups feel the U.S. Department of Transportation has been too soft on automakers and slow to seek details via legal powers and has not been aggressive in levying fines.

In what appears to be an unprecedented move, the National Highway Traffic Safety Administration is probing beyond Toyota’s U.S. operations. Federal law requires auto manufacturers must notify the NHTSA within five days of detection of a safety defect and promptly institute a recall. The agency wants information about when the same problems reported here appeared in models on the European market.

In response to the crisis, Toyota has scheduled a temporary halt in production facilities in Texas, Kentucky, and Alabama to deal with a possible building up of dealership inventories. According to a company spokesperson, none of the over 8,000 workers employed at the three plants will be affected by the hiatus. Toyota’s top management has issued apologies for the problems and is launching efforts to restore consumer confidence. In the U.S. it is reported that over 500K vehicles in the 2.3 million recalls for sticky accelerators have been repaired.

But with new allegations looming about problems in other Toyota models, it is clear that some king-sized problems are facing this automotive giant.

Problems in 2009 these causes “RECALL”:

Floor mat problem

On November 25, 2009 Toyota amended its floor mat recall involving the same 3.8 million vehicles sold in North America. Toyota will reconfigure the accelerator pedal, replace the all-weather floor mats with thinner mats, and install a brake override system to prevent unwanted acceleration. The brake override system, also called “brake to idle” and already a common design in German cars, allows the driver to override the accelerator by hitting the brakes. In a follow-up statement, the NHTSA announced the November 25, 2009 recall details as a “vehicle-based remedy” to address the floor mat pedal issue.

According to Toyota, the repair work done under the amended recall for floor mat incursion problems are as follows:

  1. The accelerator pedal will be shaved to reduce risk of floor mat entrapment.
  2. All-weather floor mats will be removed and replaced with a newly designed mat.

A brake override system, which cuts engine power if both the accelerator and brake are pressed, will be installed. A replacement pedal with the same shape as the modified pedal would be made available at a later date. For drivers who have existing all-weather floor mat but do not need or want the newly designed all-weather floor mat, the existing mat will be removed and the owner reimbursed.

In its November 25, 2009 announcement, Toyota stated that dealers would be instructed first on how to reshape the accelerator pedal for the repair. Installation of the brake override began in January 2010 on Toyota Camry and Lexus ES 350 models, the vehicles with the most units included in the recall.

Accelerator pedal problem

On January 21, 2010, Toyota initiated a second recall, this time in response to reports of accelerator pedals sticking in cars without floor mats. In its recall announcement, Toyota stated that:

The condition is rare and does not occur suddenly. It can occur when the pedal mechanism becomes worn and, in certain conditions, the accelerator pedal may become harder to depress, slower to return or, in the worst case, stuck in a partially depressed position.

A concurrent NHTSA press release identified the issue as the “Sticky Pedal Recall” and described the problem and remedy as follows:

  1. The accelerator pedal becomes harder to depress or slower to return to the closed position.
  2. The accelerator pedal may become stuck in partially depressed position.
  3. Should the pedal become stuck while driving, drivers should switch to neutral and stop.
  4. A repair fix would be applied by the manufacturer to prevent the sticky pedal condition.
  5. A new pedal would later be made available to replace repaired pedals.

The January 21 recall announcement for the accelerator pedal problem covered 2.3 million vehicles sold in the U.S. Toyota then widened the recall to include 1.8 million vehicles in Europe and 75,000 in China. On January 26, Toyota announced that until they had finalized an appropriate remedy to address the potential for sticking accelerator pedals, sales would be suspended for selected vehicles. On January 31, 2010 the Wall Street Journal reported that U.S. regulators cleared Toyota’s proposed repair for the pedals and the company would resume production by February 8. On Feb 1, 2010 Toyota said that its dealers should get parts to fix the sticky accelerator pedal by the end of the week.

Sudden unintended acceleration problem

The problem of sudden unintended acceleration has been reported to have existed in some Lexus vehicles and Toyota vehicles going back to 1999, when CTS did not even make this product for any customer, CTS believes that the rare slow return pedal phenomenon, which may occur in extreme environmental conditions, should absolutely not be linked with any sudden unintended acceleration incidents. CTS is also not aware of any accidents and injuries caused by the rare slow return pedal condition, to the best of its knowledge. CTS wishes to clarify that it does not, and has never made, any accelerator pedals for Lexus vehicles and that CTS also has no accelerator pedals in Toyota vehicles prior to model year 2005.

According to Toyota, the tactile response friction device in the affected Toyota electronic accelerator pedals sometimes creates too much friction. This excess friction either slows the pedal return or completely stops it. In the worst case, once a pedal is pushed to a specific setting, it stays at the setting even if the driver removes their foot from the pedal. Early reports, in March 2007, involved the Tundra pickup truck, which used nylon 4/6 in the friction lever.

Some questions and confusion exist if the Toyota explanation fully accounts for all instances of the unintended acceleration involving Toyota vehicles. CTS Corporation, the American manufacturer of the electronic accelerator pedals that Toyota claims are at fault, has announced that.

Problem in electronic throttle control system

An electronic throttle control system is a drive-by-wire system, in which the accelerator pedal and the engine are indirectly linked electronically, instead of directly linked mechanically. This means that input from the accelerator pedal is just one input used to decide how wide the throttle is opened. On Feb 13, 2010, The Wall Street Journal reported that Kane’s company was “controversial” because its income comes from lawsuits against auto manufacturers, which was not disclosed in media reports; auto journalists noted that the firm had a “vested interest” in blaming manufacturer defects while avoiding operator error. The Los Angeles Times reported that since Toyota and Lexus began installing electronic throttle control systems in 2001, complaints of unintended acceleration with vehicles from both those brands rose sharply. Electromagnetic interference with the electronic throttle control system is another possible cause of unintended acceleration.

Q2: What was their strategy to overcome the problem?

Toyota is losing money and credibility as of late. After dealing with recalls for faulty accelerator pedals for the past few months, the car manufacturer is still reeling. Things aren’t looking to get better any time soon. Reports of Toyota losing 60% of its revenue from having to halt sales has left Toyota financially and emotionally drained. Now Toyota has to rebuild its reputation, and find a way to instill trust and loyalty from consumers once again.

It’s been a humbling experience for Toyota, as the car company has enjoyed years of bragging rights for winning awards and having set various standards for its model ranges. Now that Toyota has had to recall so many of its vehicles, there are several groups, organizations, authorities and consumers that are digging around for more issues that Toyotas may have. The result looks a little like a witch hunt, with everything Toyota does being a matter to be questioned.

Toyota’s New Strategy: Find Flaws before You Do.

Other Strategy to Overcome the Problems

Redefine Relationship With Customers:

Given the current car show season that launches in Detroit and makes its way across various states, Toyota has found itself on the defensive on more than one occasion. One way in which Toyota is looking to deal with the ongoing backlash is to redevelop its relationship with the customers. Finding a way to regain their trust will be a long and toilsome road, but it’s quite necessary for the car manufacturer as it hopes to move forward.

Finding the right formula for regaining customer trust can be very tricky, especially in an era where cars are expected to be innovative and safer than ever. From a branding standpoint, Toyota is taking a proactive stance on addressing any issues people may find with its cars, letting people know of the issues and working on them to relieve any concern consumers may have.

People are going to be sticklers about Toyota’s cars for a little while now, and it’s going to take a great deal of resources and attention for Toyota to invest in anticipating consumer issues while still seeing declining revenue. Yet it’s something Toyota has to do in order to begin to rebuild its relationship with its customers. As Toyota was also one of the first brands to largely commercialize more eco-friendly vehicles, the technology behind our future’s cars is something that should be addressed early on.

Promise of “quality”:

Without delivering quality, you have no chance of establishing a brand. 60 years back, Japan was an emerging economy and a developing one, right after World War II. It delivered on the “Brand Japan” by becoming synonymous to quality. So much so, that Toyota, and other auto manufacturers became quality and brand leader in the automotive sector.

Despite the physical damage Toyota’s shortcomings have caused, the resulting attention to issues that may not even lead to a recall may be a good process for any car company. As several safety aspects of a car become more integrated with the vehicle’s electric system, a lot more attention will have to be focused on those related safety issues.

For Toyota, however, the process of rebuilding its brand has just begun. Even as Toyota looks for issues that may later be discovered by consumers and special interest groups, the open and upfront method of alerting customers to these issues still has its own downfall. The process overall leaves Toyota open to criticism from other car manufacturers, especially now that companies are able to more directly address other brands in their marketing campaigns. When it comes to a quick bounce back from Toyota, don’t hold your breath.

Come Up With Sustainable and Environmental Friendly Car:

In the early 2010s, Toyota plans to sell a million hybrids per year globally, a majority of those in North America. To accomplish this, Toyota will launch eight all new hybrid models over the next few years. These will not include next generation versions of current hybrids; instead, they will be all new dedicated hybrid vehicles, or all new hybrid versions of existing gas engine models.

The heart of hybrid technology is its battery. Since the early 90’s, during the early stages of first-generation Prius development, Toyota has been committed to in-house R&D of advanced nickel-metal hydride batteries. Through three generations of Prius and a total of seven full-hybrid models, it has systematically reduced size, weight and cost while improving energy density, quality and reliability.

Toyota’s joint venture partnership with Panasonic has been a key element of its success in the advancement of hybrid technology. Later this year, Panasonic EV Energy (PEVE) will have three separate, fully operational production facilities with a combined capacity of more than one million units per year.

Moving the promise of electrification one step further, Toyota recently kicked off its global demonstration program involving approximately 600 Prius plug-in hybrid electric vehicles. Beginning early this year, 150 PHVs will begin to arrive in the U.S. where they will be placed in regional clusters with select partners for market/consumer analysis and technical demonstration.

The Prius PHV introduces Toyota’s first generation lithium-ion drive battery. When fully charged, the vehicle is targeted to achieve a maximum electric-only range of about 13 miles and capable of achieving highway speeds of more than 60 mph in electric-only mode. For longer distances, the Prius PHV reverts to “hybrid mode” and operates like a regular Prius. This ability to utilize all-electric power for short trips or hybrid power for longer drives alleviates the issue of limited cruising range encountered with pure-electric vehicles.

All program vehicles will be equipped with data retrieval/communication devices which will monitor activities such as: how often the vehicle is charged and when, whether the batteries are depleted or being topped-off during charging, trip duration and all-electric driving range, combined mpg and so on.

As it becomes available, data from the program vehicles will be posted to a dedicated Web site. This in use, readily available data will help consumers understand how the vehicles are being used and how they’re performing.

Toyota believes this demonstration program is a necessary next step in societal preparation in that it allows Toyota the unique opportunity to inform, educate and prepare customers for the electrification of the automobile in general and the introduction of plug-in hybrid technology.

Come up with Expert’s Findings:

In Toyota’s web site they emphasizing The Wall Street Journal reported on February 25, 2010 that “safety regulators, human-error experts and auto makers say driver error is the primary cause of sudden acceleration.” Regarding the 2009-10 Toyota recalls, Ward’s Auto noted that NHTSA investigations over past years have found that the majority of sudden unintended acceleration cases are due to driver error. In such cases, accidents are the result of drivers mistakenly stepping on the gas pedal instead of the brake. On November 29, 2009, the Los Angeles Times quoted a motor skills consultant stating that the fault in sudden acceleration cases “almost always lies with drivers who step on the wrong pedal.” In February 2010, Car and Driver suggested that the alleged accident rate of 1 in 200,000 recalled Toyotas was “highly unlikely” to result from vehicle defects, pointing to an increased danger for drivers who “aren’t smart or calm enough to shift to neutral”. The same month, Forbes referred to auto industry experts as “skeptical” of defect explanations, suggesting that “driver error and panic account for many reported problems” with recalled Toyotas. On February 4, Leonard Evans, author of Traffic Safety, claimed that driver behavior was the main factor in Toyota accidents, and that the consensus of 70 years of scientific research is that driver error is the prominent explanation for automotive fatalities. Megan McArdle and attorney Ted Frank argue that the fact that most of the incidents of sudden acceleration in Toyota occur in elderly drivers strongly suggest that there is not an electronics problem as opposed to one of pedal misapplication. However, lawsuits filed regarding sudden unintended acceleration cases, along with related third-party investigation reports, have typically avoided the driver error explanation.

Driver error acceleration factors

On March 10, 2010, the New York Times ran a piece by Richard Schmidt, PhD, professor emeritus of psychology at University of California Los Angeles and sudden acceleration researcher, suspecting driver error as the primary cause of unexplained Toyota sudden acceleration reports. Schmidt pointed to several factors that make driver error more likely: elderly driver age, lack of experience with the car, and short stature. In addition, unexplained sudden acceleration events were most frequently reported as occurring from low speed or fully stopped. Typically, the driver was intending to press the brake, and did not consciously confuse the pedals; however, because of advanced age and neuromuscular irregularities, short stature and difficulty reaching the pedals, a slight misalignment in seating position, or unfamiliarity with the car model, the driver’s foot contacted the accelerator by mistake. The resulting unexpected sudden acceleration would lead to panic, with the driver thinking that the acceleration system had failed. The immediate response would be to brake hard, but not knowing that their foot was on the accelerator, pressing down caused greater acceleration. In such panic situations, the driver would think that the brakes were not responding, and continue pressing on the gas pedal until they crashed. Switching to neutral or turning off the ignition was typically not contemplated. Incidents mainly occurred on automatic transmission-equipped cars.

On March 12, 2010, Autoline argued that searches for additional vehicle defects were likely fruitless, as driver error was the primary cause of the 0.009 per million rate of Toyota sudden acceleration incidents. Autoline pointed to “demographics and psychographics”, namely elderly drivers and pedal misapplication, and noted that drivers with Type II diabetes can lack sensation in their feet. Wired wrote that since investigators have been “unable to find evidence supporting drivers’ claims their Toyotas suddenly raced out of control” operator error is the most likely explanation. However, victims and relatives of sudden acceleration cases are commonly unwilling to suspect involved loved ones, and blame the vehicle instead. On March 12, 2010 for The Atlantic, Megan McArdle analyzed alleged Toyota acceleration reports and found the highest distribution of involved drivers between 70 and 80 years old, with the average age skewing over 55; elderly were more susceptible to “neuronal misfiring” and pedal misapplication. While many cases lacked exact details, over half occurred from a complete stop or low speed, providing a window for the pedal misapplication to occur. A prior GM study found that 60 and 70 year olds were six times more likely to experience sudden acceleration than 20 to 30 year olds. In the New York Times, Richard Schmidt concluded that a brake override system could prevent acceleration cases where a vehicle defect existed, but would not prevent sudden acceleration cases caused by pedal misapplication.


Despite the physical damage Toyota’s shortcomings have caused, the resulting attention to issues that may not even lead to a recall may be a good process for any car company. As several safety aspects of a car become more integrated with the vehicle’s electric system, a lot more attention will have to be focused on those related safety issues.

For Toyota, however, the process of rebuilding its brand has just begun. Even as Toyota looks for issues that may later be discovered by consumers and special interest groups, the open and upfront method of alerting customers to these issues still has its own downfall. The process overall leaves Toyota open to criticism from other car manufacturers, especially now that companies are able to more directly address other brands in their marketing campaigns. When it comes to a quick bounce back from Toyota, don’t hold your breath