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Toyota Quality Control

EMBA 690
by

Tish Hardy

on 4 January 2013

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Transcript of Toyota Quality Control

EMBA 690 Group Project Toyota Quality Managemnt Analysis of Toyota Recall Issue Strategic Management Principles
Created, Shaped, and Developed by Maria Hrubin by Kwee Yap Strategic Options into International Market by Maryann Chartier Ethical Concerns by Sreedhar Babu Pamidi Results of Reported Issue within Market Industry by Latisha Hardy Customer confidence Long-term impact Floor mats
Gas pedal issues
Electronic systems governing the gas pedal
Tin whiskers inside electronic systems

No clear conclusion Causes of sudden acceleration 2009-2010 Corolla,
2009-2010 Matrix,
2005-2010 Avalon,
2007-2010 Camry,
2010 Highlander,
2007-2010 Tundra,
2008-2010 Sequoia
Toyota’s value on the Tokyo stock exchange dropped by 20% 2009 Acceleration Issue GM Market share Toyota vs. GM Impact on sales 2009 - Acceleration Issue
Mission
“Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people” Toyota’s Vision & Mission statements Worldwide Operations
March 2012,
50 overseas manufacturing companies in 27 countries
vehicles are sold in more than 160 countries and regions. Toyota Strategies:
Export – impacted by sanction and trade barrier
Joint-Ventures
Acquisitions
Cooperative Alliances
Just-In-Time and Lean Manufacturing
Low-Cost
Innovate
Separation of Ownership and Management
Local Design and Production Asia-Pacific – 2 locations
China – 3 locations Design and R&D Centers Japan – 5 locations
USA – 6 locations
Europe – 4 locations Since its foundation, Toyota has been using its Guiding Principles to produce reliable vehicles and sustainable development by employing innovative and high quality products and services. Aim to achieve the concept of "Made by Toyota“ and “Made in” The basic mind-set desired and focuses on specific principles for Toyota employees This is at the very heart of Toyota's corporate philosophy and is characterized by highly efficient concepts. Outlines the kind of company and the values of Toyota Toyota's unique management philosophies, values, and methods SUA Timeline and Toyota’s Ethical Dilemma Toyota recalled over 10 million cars from several countries which include US, Europe, China and its home country Japan

Bog change in the consumer attitudes towards Toyota's American competitors

The big 3 U.S. automakers and U.S. Government were significantly benefited from Toyota’s quality issues.

U.S. automakers appear to be back at the forefront of technology and innovation.

US. Government is collecting a total of $32.4 million from Toyota towards fine for recalls.

It is really a turning point for American car makers and will gain competitive advantage if they continue to build good quality. (Ford recently recalled 89,153 vehicles which include new Escape, Fusion models for Engine Fires).

Considering recent Toyota's major recalls, Toyota may get their quality perception back but may never get back to the quality premium position.

Apart from its recent quality issues, Japan’s earthquake, tsunami last year and China problems, the company had predicted a net profit of Y780 billion for the financial year to March, its highest in five years. Summary Recent surveys showed that 46.4% of Americans believe that American cars are the best-made vehicles in the world, the same was 29% in 2006.

Of the three American automakers, Ford is expected to benefit the most, as it is using Differentiation business-level strategy to gain market share. Ford’s September 2012 sales up by 73%. Who really benefited from Toyota Quality Issues ? On 11/13/2012, Toyota agreed to pay $25.5m to settle a US class action lawsuit brought by shareholders for not disclosing its safety and quality issues at the time. (Jonathan Soble & John Reed (November, 2012).

Toyota already paid a record $16.375 million fine to US government in the year 2010 for accelerator issue.

Toyota was also fined $16.05 million for improperly notifying the National Highway Traffic Safety Administration about a safety defect that could result in the loss of steering.

Toyota suspended sales of its luxury Lexus GX 460 after Consumer Reports warned shoppers not to buy the SUVs due to the threat of roll over of vehicle on sharp turns. (CNN Money, 2010).

Last week, Toyota cut 50,000 vehicles from its sales forecast for the year. This was due to the drop in Toyota car sales in China. Significant Quality Impacts
Year: 2012

Recalled 7.4 million vehicles to address a faulty driver-side power window switch which may lead to possible fire. (biggest recall in history).

Toyota announced its largest recall (ever in its home country Japan) of nearly 2.8 million vehicles on 11/14/2012, to fix faulty steering columns and a wiring problem. (Second multi-million car recall in two months).

Year: 2009 & 2010

Recalled millions of vehicles for unintended acceleration issues. Toyota Motor Corporation - Quality issues References :

Bill Vlasic (October, 2012). Auto sales are highest in 4 years. Retrieved on November 13, 2012
from http://www.nytimes.com/2012/10/03/business/g-m-and-ford-post-lackluster-
sales.html?_r=0
CNN Money (Dec, 2010). Toyota to pay $32.4 million fine for recalls. Retrieved
on November 13, 2012 from http://money.cnn.com/2010/12/20/autos/toyota_fine/index.htm
David Aaker (December, 2012). The real impact of the Toyota quality issues. Retrieved on
November 13, 2012 from http://www.prophet.com/blog/aakeronbrands/9-the-real-impact-of-
the-toyota-quality-issues
(Global Auto Sources, 2012). GM, Ford sales in China rise despite slowdown in economic
growth. Retrieved on November 13, 2012 from http://autonews.gasgoo.com/china-news/gm-
ford-sales-in-china-rise-despite-slowdown-in-e-121113.shtml
Jennifer Geiger (October, 2012). Toyota recalls 2.5 million vehicles. Retrieved on November
13, 2012 from http://blogs.cars.com/kickingtires/2012/10/toyota-recalls-25-million-
vehicles.html
Jonathan Soble & John Reed (November, 2012). Toyota in second big recall in two months.
Retrieved on November 14, 2012 from
http://www.ft.com/intl/cms/s/0/2d18c870-2e33-11e2-8f7a-00144feabdc0.html#
axzz2CDOBXQDYl
Michael A. Hitt., Duane Ireland., & Robert Hoskisson (2012). Strategic Management
competitiveness & Globalization (10th ed.). Canada: South-Western Cengage Learning.
Motor Trend (n.d.). U.S. Market share for the top 5 automakers. Retrieved on November 13,
2012 from http://www.motortrend.com/features/auto_news/2011/1202_u_s_markets_share
_for_the_top_five_automakers/ Source : http://www.goodcarbadcar.net/2012/08/usa-july-2012-auto-sales-brand-rankings.html Market Share Toyota’s Quality Issues on Domestic and International market GM had 14.4% market share in China in the third quarter of 2012 with 10.5% raise in sales.
Chevrolet overall sales up by 8.3%
Buick sales up by 7.7%
Cadillac sales by 19.5%
Ford sales up by 14%
Impact of Toyota Quality issues on Auto market ? The big 3 U.S. automakers and U.S. Government.

U.S. Government collecting a total of $32.4 million from Toyota towards fine for recalls

Big change in the consumer attitudes towards Toyota's American competitors Ford, GM and Chrysler.

Great opportunity for the three U.S. automakers to gain competitive advantage over Asian car makers and gain long-term profits if recent trends continue. (Aaker, 2010).

Significant increase in sales for Ford, GM and Chrysler (both domestic and International). Who really benefited from Toyota Quality Issues ? Toyota and NHTSA Corporations Corporate Governance Checks-and-Balances Liabilities Accountability Questions Thank you :-)
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