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The Real Impact of the Toyota Quality Issues

The automaker may not be able to regain its quality premium position.

Recently there have been dramatic sales increases for Ford and GM and other automotive firms while Toyota experienced a small sales decline. Why? Certainly, the quality issues that Toyota has faced, around the “sudden acceleration” hypothesis and a series of visible recalls is a primary reason.

There is little question that the Toyota brand has been tarnished to the point that some view it now as just another brand with respect to quality. There has been significant short-term damage. However, in my view, the Toyota quality image, while it has suffered, will be resilient. Toyota will get its actual and perceived quality back over time. It is too good of a company not to.

In my view, the real long-term news is not that Toyota has faltered, but that Ford, GM, Hyundai, and other automobile brands have broken through the glass ceiling. Heretofore, these brands have not been able to get full credit for their quality improvements. The quality of many brands has been equal to Toyota’s for some time, but they have not been given credit for it because the unshakable perception in the marketplace was that Toyota was the gold standard.

“The Toyota quality image, while it has suffered, will be resilient.”

Competitor brands were not judged with respect to their actual quality or their quality improvement. They were instead judged in comparison to Toyota, and the perception was that no other brand was as good as Toyota. There was a glass ceiling, no matter how good the cars of Ford, GM, Hyundai and the others were, there would always be inferior to Toyota. The situation has changed. The glass ceiling has shattered. That is the real implication of the Toyota quality stories.


FINAL THOUGHTS

Toyota may get its quality perception back but may never get back the quality premium position. And it will now become possible for other brands to have their actual quality achievements translate into positive perceptions in the marketplace. This hypothesis is speculative and I would enjoy hearing if others agree.

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