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Troubled Toyota

Photo credit: angusw on Flickr

I feel compelled to share some thoughts on Toyota’s brand troubles.

Jim Lentz, president of U.S. Toyota sales, acknowledges that the situation is embarrassing, “but it doesn’t mean we (have) lost our edge on quality.”

Maybe not. But here’s the problem. First we learned of the accelerator problem. And now we’re hearing about braking problems with the Lexus and Prius. If we just had the accelerator issue, consumers might be willing to give Toyota the benefit of the doubt. But with other problems coming to light, consumers may now question who Toyota really is.

Is Toyota the auto company who can be counted on to build reliable, high-performing vehicles? Or is Toyota a brand that’s no more trustworthy than any of the other big brands?

Toyota has always ranked exceptionally well in the perception of value category. The current crisis now threatens to undermine that precious asset.

What’s the lesson?

Well, for starters, you can never let up on guarding your reputation.

As I’ve said many times before, brand building is a marathon event (probably more like an ultra-marathon). It’s tough, takes a long, long time and there’s no shortcuts. You build your brand mile by mile by mile.

But if you let up for a moment, if you slip, if you fail to do what you need to do, if you let your customers down, brand value that’s taken decades to build can be destroyed in an instant.

Guarding your brand’s reputation must be an obsession. It’s a total commitment.

Through all of the media reports on Toyota’s troubles, one of the ideas put forth is that the Japanese auto manufacturer had gotten complacent and overly focused on growth.

In fact, you can go back as early as 2005 and 2006, Toyota was talking then about the need to fight complacency and re-focus on quality even as it pursued growth across the globe.

Wasn’t it the Japanese who taught us that the relentless pursuit of quality and continuous improvement is key to growth?

For Toyota, the worst may not be over. We’re hearing reports that Toyota knew about the accelerator problem for over two years. And according to a U.S. House of Representatives committee, the sudden acceleration problem has been linked to 19 deaths in the last decade.

I think this is the most troublesome part of this story… that Toyota may have hid from its own problems. All of the sudden, it’s not just reliability and quality issues, it’s a question of integrity.

My view: Toyota will need to work hard, very hard, to bounce back from this crisis. They need to earn back the trust they’ve lost, and they need to rebuild the perception of high value.

Part of the value of having a strong brand is the ability to weather a storm when things go against you. Toyota will benefit from the brand equity it’s built with consumers, especially Toyota loyalists. But rebuilding the brand equity lost won’t happen overnight. It’s going to take years.

For more on Toyota’s troubles, see Toyota’s Chief Steps Forward to Apologize.

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