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Toyota’s real problem…

February 10, 2010

Up to now, I’ve consciously avoided writing about Toyota’s recent recall woes. First, because I think the recall itself is ridiculously overblown, and second, because it’s already been covered ad nauseum. The mainstream press has done its usual job scaring the piss out of people, and most of the gaps they’ve left have been filled by the blogosphere, from Jalopnik’s epic rant about how Toyota’s history of building dull cars has bit them in the ass to Joe Jaffe’s list of five ways Toyota and companies like it can mitigate this kind of PR firestorm hell in the future.

But there’s one thing that hasn’t really been explored amid all the chatter, and that’s why this recall nightmare is so destructive to Toyota in particular.

Now, plenty of people have come to the rather obvious conclusion that this recall is going to put a massive dent in Toyota’s reputation for quality and reliability. But the problem isn’t the recall. The problem is Toyota’s longstanding embrace of quality and reliability as its dominant selling proposition.

The problem with this embrace is threefold.

First, it can’t hold, as we’re seeing now. If you bill your cars as ultra-super-reliable, and people buy your cars mostly because they are ultra-super-reliable, well that’s great, until some unforeseen thing happens that disproves that ultra-super-reliability. Then your selling proposition is gone.

By contrast, look at Mazda. Their main selling proposition is “zoom-zoom”. In other words, their cars are typically more fun and more engaging to drive than the competition. It’s a positive characteristic, and one over which they have total control. They can tweak the suspension setup, the steering feel, seat design and whatever else to deliver on that proposition.

Even Mazda's minivan receives high marks for its sharp handling...

You just can’t control reliability the same way. You can try, you can engineer the hell out of your cars, as Toyota does, and honestly, as most manufacturers do. But in something as complex as a car, somewhere, somehow, something is going to give in an unforeseen way.

Second, placing reliability above all else leads to dull cars. No, seriously, it does, in part because of the way quality is rated. The J.D. Power Initial Quality Survey counts things like firm ride or road noise as quality problems, which is one of the reasons why a brand like Mini usually places pretty low. To bump up those IQS scores, automakers put a lot of effort into NVH (noise, vibration and handling). The surest way to avoid getting dinged for those kinds of things is to make the car so isolated from the road that the drivers don’t hear or feel anything. But this also leads to soft suspension, overboosted steering with all the road feel of a Pole Position arcade game, and near-zero involvement with the road. In other words, dull cars.

Not exactly pulse-pounding...

Third, reliability is a game others can play. Back in the 70s and 80s, when it was a very likely possibility that your car would either kill you or leave you stranded, Toyota’s reliability was a revelation. But the game has changed a lot over the last twenty years. Nowadays it’s pretty easy to find a car that’s every bit as reliable as a Toyota. There’s pretty much every Honda. And Hyundai and Kia, who back up their quality claims with ten-year warranties. Even the domestics have risen to the challenge. Cadillac, Buick, Ford and Lincoln routinely ride near the top of quality surveys, and all four are currently surging with truly competitive vehicles.

So…the underlying problem I see for Toyota going forward is how they compete now that they’ve lost that unassailable reliability. I’m sure they’ll manage, but they’re also going to have to develop a selling proposition above and beyond reliability if they want to thrive as they have. My guess is that they’ll go with green – where they already have a solid leg up with the Prius.

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