This has been a tough month for the “Japanese Quality” brand in the auto business.
Toyota Motor Corp.’s announcement today that it will recall 7.43 million vehicles worldwide to fix power window switches that could catch on fire followed hard on the heels of three separate recalls this month by rival Honda Motor Co 7267.TO -0.81%.
All together, the two auto makers have recalled this month a total of about 9.3 million vehicles between them. None of this does any good for Toyota 7203.TO -1.46% and Honda’s reputations for building extraordinarily durable, well-engineered vehicles — hard won brand images which are the foundations of their success, particularly in the U.S. market.
Recalls don’t necessarily undermine a company’s sales over the long term. Toyota suffered a series of serious and largely self-inflicted wounds to its corporate image in 2009 and 2010 with its botched handling of recalls to fix sticky accelerators and poorly designed floor mats linked to reports of sudden acceleration. Those recalls ultimately affected 11 million cars and trucks worldwide, and the company’s apparent reluctance to own up to the problems led company President Akio Toyoda to do penance before congressional committees in Washington, D.C.
This year, however, memories of the sudden acceleration flap have faded. Toyota’s U.S. sales have rebounded and the company’s been regaining much of the market share it lost to the Detroit Three in 2010 and 2011. Honda, too, has been regaining share. But today’s big Toyota recall, and the series of three recalls at Honda affecting older versions of popular models such as the CR-V sport utility vehicle and the Civic and Accord sedans, give Detroit auto makers and their dealers a fresh opportunity to challenge shoppers who think the Big Two Japanese auto makers are the default choice for quality in mass market rides.
A reputation for robust reliability is money in the bank for an automotive brand. For years, Detroit executives fumed that customers would pay more for a Toyota Camry or a Honda Civic than for rival Detroit models that on paper we just as good. The main reason for that premium was that year after year, Toyotas and Hondas ranked at the top in quality and reliability surveys done by Consumer Reports magazine or J.D. Power and Associates. Consumers paid more up front to own vehicles they reckoned — with good reason — would cost less to maintain, last longer and be worth more at trade-in time.
But the quality gap between Toyota and Honda and the rest of the industry is narrowing. Later this month, Consumer Reports is scheduled to release its latest “Auto Reliability Survey” and the magazine has promised that the report “shows significant changes for the domestic auto makers.” Given Consumer Reports long record of criticizing the Detroit brands, another report showing that they lag behind their Japanese rivals wouldn’t merit a hint that there’s surprising news.
