Toyota Crisis Management

Toyota Crisis: Management Ignorance?

Abstract
Since the late 2009, the famous vehicle manufacture Toyota has suffered a severe crisis due to unintended quality problems in its cars which had triggered Toyota’s largest officially recalls of its cars around the world. This crisis threatens the company’s previous reputation of good quality cars, as well as the brand image built up over time. This study aims to elaborate on the Toyota crisis in order to understand why Toyota faces this crisis and how they deal with the crisis; and investigate consumers’ perceptions of Toyota brand as the outcome of the crisis, with a focus on Swedish market. A qualitative research along with a number of face-to-face interviews with Toyota Swedish dealer and Swedish vehicle consumers is conducted. The findings reveal that the impact of the Toyota crisis in Sweden is not as serious as that in America; there remain satisfied and loyal Toyota’s customers who are not swayed by the negative publicities; While Toyota should manage the crisis even in a better way in order to retain its good reputation.
INTRODUCTION
“We deeply regret the inconvenience and concern caused to our customers and others by our recent recalls of multiple vehicle models across multiple regions.” – Aki Toyoda, the CEO of Toyota Motor Corporation1 (Toyota website). Since the above apologetic speech was addressed by Aki Toyoda at a press conference in February 2010, it had been highlighted at the front page of Toyota’s official website for a few months. Beside the regretful expression we can learn from this public release, it also implies that the Toyota, one of the world’s largest automakers, is suffering in their recent recalls of millions of vehicles round the globe. Safety recalls are common issues occurring in automobile industry, few may have long run impact on the automakers involved if handled correctly. However, in this case, the disaster engulfing Toyota is of a different order (The Economist, Feb.6,

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