Toyota Grapples with PR Bungles and Tarnished Brand

Toyota Motor Corp -- one of the most savvy car brand-creators in Asia is floundering. Since the company has been faced with an unprecedented recall of millions of vehicles, rivals have been swooping in on its customers. The motor company has created a PR nightmare by consistently playing down the recurring complaints of unintended acceleration, breaking the cardinal rule in crisis management: assume the worst.

My PR background says that people want to know what's going on and that Toyota should fess up and take full responsibility, be empathic to the victims and their families and be in control by outlining the problem and how they intend to solve it. Right now, Toyota President Akio Toyoda, the grandson of the company's founder, has not formally addressed the public or media on the recall problems. Even when they announced the recall initially, they shouldn't have just said "We're going to do a recall." They should have explained what was going on. Also, there should have been a heartfelt apology from the top.

Through November, the company continued to blame loose mats for the problem. That has eventually spread to a potential problem with accelerator pedals, and U.S. safety regulators are now renewing efforts to re-confirm whether the electronic throttle control system could have been at fault.

At a news conference in Nagoya n Tuesday,the first appearance by an executive form headquarters since the recall expanded last week, there was no deep bows, a standard fixture in Japan when a firm declares it is responsible for its mistakes.

Now, the problem seems to have spun out of control. At a more recent news conference, a Toyota executive in charge of quality, Shinichi Sasaki, said part of the reason Toyota decided to use U.S. auto parts maker CTS's accelerators was to help contribute to the local U.S. economy. That was not what customers want to hear, especially when tragic memories of the car crash incidents are still fresh.

So, what has Toyota done to reach out and communicate the problem with its customers? Toyota ran full-page ads in major U.S. newspapers on Sunday alerting consumers to the recall and production shutdown. Jim Lentz, president of Toyota Motor Sales U.S.A., appeared on U.S. TV and expressed regret for worrying drivers of its cars. Lastly, they are conducting a very extensive recall, which shows they are taking the recall seriously.

Since this issue with Toyota, U.S. motor company's sales have been up. Toyota's sales have slipped 16 percent and it could fall further. They have lost an estimated 20,000 in sales after it stopped selling eight models because of the defective gas pedals. Ford announced that its sales have rose 25 percent, Hyundai said sales rose 24 percent for the month, GM said its sales increased 14 percent and Nissan rose 16 percent.