OPINION18 March 2010

Can research save Toyota?


Sue Barnes, joint MD of research agency Brownsauce and former European automotive director at JD Power, asks whether better research could have helped Toyota avoid the recent recall debacle, and what it can do to improve the car maker’s prospects.

It is one of the toughest decisions a car manufacturer has to make – to announce a product recall. In January that challenge hit new heights for Toyota when a product safety recall turned into a series of global recalls affecting a range of Toyota vehicles. It was unprecedented in the industry.

One, as yet unanswered question is whether putting a higher priority on customer intelligence could have played a part in preventing this. A recall on any level clearly presents a manufacturer with repercussions far beyond the obvious safety implications. It tears at the very heart of the brand. Undoubtedly brand trackers the world over will draw similarly dire conclusions about the previously unshakeable success story that is Toyota – until recently the largest motor manufacturer in the world. The Japanese entered Europe and the US back in the 1970s, successfully trading on ‘affordable reliability’,a status deserved at the time and still strongly attributed to the Japanese brands today. A myriad of research shows that there are clear links between perceptions of ‘reliability’, ‘quality’ and ‘safety’ of cars.


Safety was never a pre-requisite at the start of mass car production in the early 20th century. In fact it had to be forced upon manufacturers once fatalities started to increase. However, vehicle safety is now a given in the mind of the consumer, so pulling this from under Toyota’s feet could be catastrophic. It is, after all, a matter of life and death. So, could Toyota have done more to mitigate this turn of events?

It is reasonable to assume that there had been some incidence of customer complaints to dealers about sticky accelerators, as well as directly to Toyota’s customer relations departments around the world, but it would appear that no effective process was in place for filtering customer feedback through to the appropriate department – or if such a process did exist, it failed to recognise the seriousness of the issue raised and initiate a swift resolution.

Can research also assist in this process? Although it can certainly provide invaluable customer feedback about product issues, research is so often one of the areas to be cut first when budgets get squeezed, especially by high overhead, beleaguered sectors such as automotive. In a speech last autumn, long before the current safety recalls were announced, Toyota’s president Akio Toyoda said: “Toyota has become too big and distant from its customers.” Now they have all too clear evidence that the short term gain of cutting business information is rarely worth the long term pain. Research should be regarded as intelligence – no company can really achieve competitive advantage and long-term success without it.

Vehicle manufacturers do invest heavily in consumer intelligence, especially in the design phase. After all, every product development project is a multi-million pound programme and the competition are all simultaneously seeking to optimise design, performance, practicality and safety in ever decreasing development cycles. Toyota, like other Japanese brands, had for so many years fostered a ‘continuous improvement’ business ethic, which seems to have become specifically focussed around the logistics and costs of making the vehicles. Necessity has caused the entire industry to become obsessed with lean and hyper-efficient manufacturing processes. Massive effort is put into shaving pence off component costs in an effort to retain a workable profit margin in the cars they make, while consumers seem to conveniently forget that they are paying little more today than they did 20 years ago, even though millions of pounds have developed, progressed and refined an entirely different car.

It seems fair to draw the conclusion that the same ‘continuous improvement’ ethic did not apply to the customer feedback process. This priority seems to have fallen somewhat disastrously from the radar. But, now there are clear signs of willingness, and action, from the Toyota management team, to reinstate a focus on quality and the customer at the heart of their business.

“It seems fair to draw the conclusion that Toyota’s ‘continuous improvement’ ethic did not apply to the customer feedback process”

Even if research had previously sought specific feedback on safety matters, there is no guarantee that consumers would have voiced their expectations and concerns in this regard. History, and research, indicate that drivers are unlikely to want to pay more for safety features. Airbags had a very low take-up rate when they were first added as an additional cost option – of course, now they are standard. Today, ESP is available on some vehicles – but again, it costs. It is potentially lifesaving, but there are hardly any takers – everyone wants it for free. The industry invests, but the customer is reluctant to pay the price.

Product recalls will continue to be a fact of life for all manufacturers. Driving today is expected to be a safe mode of transport – anything that is found to undermine this must be rectified thoroughly, quickly and publicly. It brings to mind the prognosis that a problem well fixed will reap more customer satisfaction than not having had the problem at all. Perhaps the enormity of this particular episode provides a lesson for all manufacturers – not only must there be robust processes for identifying critical feedback, but there is absolutely no room for error – the resolution must be handled impeccably and, perceptions are that in this case it has not been.

Perhaps Akio Toyoda’s observation about Toyota becoming too “distant” holds the key to the long term success of many brands – stay close to your customers, don’t just listen, but really learn from them. ‘Customer first’ is a great work ethic but consumer intelligence is potentially the life blood of your brand. This is something that the company has now recognised – Toyoda has now said the firm intends to adopt a stronger framework for receiving and monitoring customer feedback. The challenge of implementing such a micro-level strategy in a massive global corporate is onerous, but essential, if Toyota are to be true to their word.

And what else might I do if I were Akio Toyoda? Well, I’d probably start by asking all my customers what would really rebuild the trust critical to saving Toyota. Then I would make sure the appropriate resulting actions and a dynamic customer intelligence strategy were absolutely embedded into the Toyota brand.

1 Comment

14 years ago

Just one question to a former JD Power Director: Knowing that Toyota won 10 out of the 22 IQS awards in the 2009 US IQS, what does that mean regarding JDPA's reliability? Could JD Power Research save Toyota?

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