Transportation Secretary Ray La Hood sent Toyota stock into a nosedive two years ago when he told a congressional House Appropriations subcommittee, “My advice is, if anybody owns one of these vehicles, stop driving it.”
Jay Leno quipped, “Things are not looking good for Toyota. In fact, today, two crash test dummies refused to get in the car.”
And of course, experts lined up to predict doom for the Toyota brand. On expert told CBS Co-Anchor Harry Smith, “We’ll be seeing for at least a decade, maybe two, that there will be major problems with the Toyota brand.”
The Toyota Brand Two Years Later
Fast-forward just two years, not ten or twenty: The Toyota brand is definitely back. After a disastrous year of sinking sales, expensive recalls, congressional hearings and a seemingly endless public relations meltdown, the Toyota brand reputation remains intact and sales are soaring.
As a brand consultant who works with various automotive brands (though not Toyota), I have been following this story closely over the last year. Here are highlights from over 40 parking lot interviews from New York to Florida of drivers and their opinions about Toyota:
Confounding comedians and critics, Toyota has become a textbook example of how a brand can bounce back. As of February, 2012, Toyota’s market share had rebounded to 13.8% of the market, despite continuing supply problems due to last year’s tsunami. Toyota’s pre-recall market share was 14.7% in January, 2010, according to Edmunds.com. According to the just-released Consumer Reports 2012 Car-Brand Perception Survey, Toyota still holds on to the #1 spot and Lexus remains in the top ten.
Part of the Toyota brand recovery is due to Toyota being cleared of accusations that electrical and engine glitches caused deadly, uncontrolled acceleration. A lengthy joint investigation by NASA and the Department of Transportation found that most Toyota and Lexus crashes were due to “pedal misapplication,” that is drivers stepped on the gas instead of the brakes. A decidedly secondary cause was floor mat interference with brake pedals. The rocket scientists at NASA and engineers at the DOT found no electronic or engine failures of any kind.
Toyota’s targeted and effective communications with consumers have also helped the brand bounce back. The company’s advertising, public relations, and digital communications have been direct, honest and voluminous. Moreover, Toyota’s use of social media show that they “get it,” engaging people in true, human, back and forth conversation. At the grass roots level, dealers have earned high marks in communicating with customers affected by the recall and performing recall services promptly.
But by far the most credit for the Toyota brand recovery is due to decades of delivering on its brand promise of durable, affordable high quality cars. As part of my work helping brands understand their consumers, I frequently turn on the video camera and conduct on-the-street interviews. I talked to drivers in a series of video interviews during the height of the recall crisis in back February 2010. In light of Toyota’s fast rebound, I was curious to hit the parking lots again. I interviewed dozens of drivers in Florida and New York to find out their opinion of Toyota and their reaction to the recalls.
Customers Talk About the Toyota Brand
There is still some left over recall anxiety. One young mom said, “I love the Land Cruiser. It is probably my favorite. But we actually just bought a Ford Flex. My husband does all the new car research and the recalls were something he mentioned as being a factor.”
More often people were philosophical. One woman said, “Technically, the defect didn’t cause the deaths and we are beginning to find out that a lot of those deaths were caused by driver error.” Another young man said, “Lots of cars are recalled. It is not just Toyota.”
The recalls don’t appear to have much negative impact. “I just bought a 2010 Toyota Venza,” said a dad I interviewed. “It’s been a great car. It’s brand new, put out after the recall. The recalls did not affect my decision at all. I thought they (Toyota) stepped up and took care of the cars the way they should have.”
In fact, excellent service at the dealer level plays a big role in the strength of the Toyota brand. One woman I talked two pushed back her sunglasses and enthused, “I love my car! I have no problem with Toyota at all.” She was directly affected by the recalls, “I had to take it back to the dealer. They were very cooperative and I was very happy. I got in and out real fast.”
And she wasn’t the only person to use the word “love.” That level of passion came through with surprising frequency when Toyota owners talked about their cars. One sprightly grandmother said: “I love Toyota. I happen to own one. It’s a beautiful little car.”
When companies find their brand in a crisis, they face three potential outcomes. First, their brand can suffer permanent damage. The only way to recover shareholder value is to sell it off or merge it with another. Second, the brand can soldier on, nursing its wounds for many years, waiting for consumers to slowly forget its woes. In the rarest of cases is what has happened to Toyota. The brand made a quick recovery because of the many years invested in keeping its brand promise, combined with effective communication, and the fact that Toyota was absolved of suspected engineering problems. It was the slowly built resiliency of the Toyota brand that made its fast rebound possible. Toyota teaches us that winning isn’t an event; it is a process of consistency and endurance.