Toyota Trouble

Anyone who's an automotive enthusiast (and who wasn't born last night - me, on both counts!) recalls the ruckus over "unintended acceleration" in Audi cars a while back. Those accusations were eventually discredited and Audi was cleared, but not before the company took a tremendous hit in sales and prestige. The current situation with Toyota Motor Company and the gas pedal recall sounds strikingly similar, and one wonders if it will end up similarly credible...

Toyota has a great reputation, and deservedly so. Their product lines - including the luxury brand Lexus - are well engineered, well made and notably reliable. This has led to industry-leading resale values and tremendous customer loyalty. Toyota has also done well in several forms of auto racing, which is arguably the most severe test of an auto company. As a constructor they finished fifth (just behind Ferrari!) in the Formula One World Championship last year!

This current debacle points out one more reason (as if we needed another!) that the US Government has NO business bailing out private companies - they are now in the position of regulating their own biggest competitor in the auto industry. Talk about a conflict of interest!!! I'm wondering what really motivates the timing and aggressiveness of these recalls and am particularly curious about that little "slip of the tongue" saying people should park their Toyotas until they are repaired.

Toyota recently surpassed GM as the world's highest volume automaker and was doing pretty well despite the economic meltdown. The Camry, Corolla, Prius and Rav4 were solidly entrenched in the top 15 best selling vehicles in America. Since the recall Toyota stock is down nearly 20%. (This would be a great buy if the market itself was at all healthy.) Toyota car and truck sales have likewise fallen off the bottom of the charts.

The timing is curious. All considered, it's difficult to envision any move that would be more beneficial to GM and Chrysler at this moment in history. Just another happy coincidence, I'm sure...

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