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Marc Gough comments in Media Magazine on Toyota’s fight to save reputation

Marc Gough comments in Media Magazine on Toyota’s fight to save reputation

Blog article entry on: Feb 17, 2010

GLOBAL – As fresh revelations concerning Toyota’s faulty vehicles continue to dominate the headlines, brand and strategy experts have expressed that the world’s largest automaker will most likely survive its latest crisis here in Asia.

According to Japanese media and reports from the US, Toyota is likely to recall at least 400,000 of its 2010 Prius hybrids around the world to fix a faulty brake problem. This will become the carmaker’s third major recall this year, following two previous problems with sticking accelerator pedals. Although the numbers of the latest hitch will pale in comparison to the earlier 8.1 million cars recalled from around the world, industry figures maintain that Toyota need not engage in “knee-jerk” initiatives to restore its image and brand for the moment.

“I think there’s already a marked difference in the nature of the response to the recall in different parts of the world,” says Graham Hitchmough, managing director of The Brand Union in Singapore. “The latest recall will impact Western markets more from a logistical point of view. Japanese consumers see the recall as more of a blip so it seems impact across Asia might be lessened.”

Joseph Baladi, CEO of BrandAsian agrees. “The company has build a lifetime reputation for quality and reliability,” he says. “Most people will accept that in spite of the scale of the recalls, it was exactly just that – a lapse. I don’t think for one moment that it is reflective of a systemic flaw in corporate culture.”

Richard Leong, regional channel planning director at Lowe, adds that unless a significant number of vehicles were to be affected by the recalls in Asia, Toyota need not partake in any additional communications other than what it has already done so far.

“The key to crisis management, is not to add on to the news,” says Leong. “Toyota just has to ensure that its cars here are not affected, they should focus now on preventive measures rather than rely on marketing.”

However, Marc Gough, chairman of Red Brand Builders, warned that the Toyota brand in Asia may still be damaged by the recall.

“Until now, Toyota was the safest decision a car buyer could make in Asia. But now, buying a Toyota has become questionable. Once the question is asked by consumers about which car they should buy – many other brands will try to answer it.”

On Friday, Toyota GB launched its first piece of advertising activity to help reassure consumers, five days after the marque rolled out a similar campaign in the US.

Toyota officials have estimated that the total cost of the global recall could be as much as US$2 billion.

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