Toyota troubles in 2014 0

Toyota-PriusBack in February Toyota recalled a staggering 1.9 million of the current Prius hybrid model, with production of the vehicle starting in March 2009. The software within the cars have a defect which causes the vehicle to slow down suddenly. The Toyota Prius is one of the most popular hybrids vehicles of all time.

Recalls can have a significant effect not only on the brand’s reputation, but also their share prices. Back in 2010 Toyota’s share prices dipped following the recall of over 10 million vehicles due to acceleration issues.

 

How rivals can benefit

Despite Toyota being the world’s biggest car brand with such a large scale of production year upon year, they have disappointingly had a large number of recalls over the years. The recalls have always affected the brand’s reputation in a negative way. This could sway customers to rival brands such as Ford, General Motors or Volkswagen for the purchase of family type vehicles.

Toyota have shelled out a huge amount of money in fines for delays in safety defect reporting. Back in 2010 they paid a federal fine of approximately £11 million and approximately £10 million in 2012.

Rivals General Motors seem to be taking advantage of Toyota’s misfortunes. They, unlike Toyota, have acted swiftly in recalling 1.37 million vehicles so far after faulty ignition switches were blamed for the deaths of 13 people.

 

Problem with the Prius

Earlier this year Toyota had more trouble, with sales of various models coming to halt in North America. The problem this time were the seat heaters. The software problem in the new Prius model sets off the warning lights. This will then make the vehicle go into a ‘fail safe’ mode. This means the car’s driving power is reduced. Toyota released a statement regarding the problem which read “In limited cases, the hybrid system might shut down and the vehicle will stop, perhaps while being driven”.

There were 400 problems reported for the reports of the software defect in February, most of them from Japan and North America.  There were no reported accidents or injuries reported from the defect.

 

Can Toyota remain number one

Toyota however are still anticipating record profits for 2014 thanks to the Japanese currency weakening. This in effects makes sales of Toyota vehicles cheaper overseas. The Japanese car brand was once again the top selling car brand in the world in 2014. Sales rose 2.4% to almost 10 million vehicles worldwide.