Toyota's Spate of Recalls -Paying the Price for Rapid Growth?
Japan Information Network Business News
www.jinbn.com
May, 30. 2006
Toyota Motor Corp. has repeatedly recalled its cars in 2006. The company filed a report with the Ministry of Land Infrastructure and Transport on May 16 that it was recalling a total of 107,767 units of the Land Cruiser Prado that were manufactured between April 96 and January 1999. The report said that the steel-made flanges that connects the driving shafts and the rear wheels of those cars were not durable enough so that the wheels could fall off after repeated turning, for instance, around corners on mountain roads.
Also, the AP reported Toyota Motor Corp. , the world's second-largest auto maker, said on Tuesday, May 30th, it would recall a total of about 1 million vehicles globally to replace faulty intermediate shafts and sliding yokes.
In a filing with Japan's Transport Ministry, the company said it would recall a total of 565,756 vehicles in Japan, including Wish, Isis, Prius and other cars built between September 2002 and November 2005.
A Toyota spokesman said the recall would also cover about 400,000 units overseas.
SOURCE.
Toyota reported on May 10 its account settlements for the term ended in March, in which it declared new highs for both sales and profit.
Major national newspapers throughout Japan, however, reported cautious views on their May 11 issues about the futures of Toyota. Some of the articles could be summarized as:
1. Increased recalls indicated bad quality control, crumbling of the "Toyota legend."
2. Fast business expansion leaves a personnel shortage
3. High-cost management by big capital investments.
It could be said that these were accurate analyses.
Recalls Occurred 5 Times in 2006 Alone
The recall of Land Cruiser Prado was the fifth such action taken in 2006 alone. In February a total of about 26,000 Ractis cars produced between September and December of last year were recalled. The reason was that there was the possibility of the metal fixtures to fasten the seatbelt of the rear seat were misssing. In April a total of about 76,000 four-wheel-drive cars of 10 models, including those of Granvia and Hiace, produced between September 1995 and October 2005 had to be recalled. The connecting section of the device to carry the driving force to the front wheels of these automobiles did not have enough heat resistance so that, in the worst case, the system could break down and the cars would not move. The subjects to this recall incident included some 3,000 ambulance cars.
Further, a total of 11,109 Lexus luxury cars of four types, including the GS430, made between July and December 2005, were recalled because of deficiency in the seatbelts. Hino Motors, Ltd. , Toyota's subsidiary, also announced on April 13 the recall of a total of 26,150 Niho Profia large trucks produced between October 2003 and February of this year because of deficiency in the turbo system.
"Like an Army with Diminishing Logistics in a War"
People in the car industry are beginning to say that "the 'Toyota legend' of high quality will crumble unless the company does something." A reporter of a trade newspaper in the auto industry said that "people inside Toyota are furiously trying to do something because the current situation will develop into something very serious if nothing is done."
As a prime reason for the series of recalls, the reporter pointed out the "drastic production expansion." In the past year, Toyota's car production over the world went up by 600,000 units. The figure is equivalent to the total production of Fuji Heavy Industries Ltd. as a whole. "Toyota is suffering from personnel shortage and workers who don't have sufficient skills are increasing at its working places. It's like an army with diminishing logistics while engaging in a war," the reporter said. "It pursued cost down, and it cannot be denied the quality went down as a result. The employees of the company themselves are now saying they have to review what they have been doing," he added.
Source:
http://www.jinbn.com/2006/05/30212653.html
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