Toyota meets quality head on

After Toyota was forced to recall a record 1.4m cars for repair last October, it got serious about fixing problems

After Toyota was forced to recall a record 1.4m cars for repair last October, it got serious about fixing problems. Last week the Japanese company recalled more than 380,000 Lexus and Toyota Highlander vehicles globally.

At the start of this month, Akio Toyoda, grandson of the carmaker's founder, was put in charge of a "back to basics" campaign to ensure quality took precedence over cost-cutting or design. Shinichi Sasaki, head of the European operations and a former quality chief, was recalled to Toyota City to support him.

Last week's criminal probe of Toyota by Japanese police over suspicions that managers delayed safety recalls by eight years demonstrates the task the company faces. It also shows the risk to the group's image. Toyota built its position in the US, the biggest market and the core of the carmaker's profitability, on its superior build quality during the 1980s and 1990s, when Detroit-based rivals were suffering from poorly made cars with little durability. Competitors have since improved.

Tadashi Arashima, Mr Sasaki's replacement as president of Toyota Motor Europe, says high-level executive involvement shows the level of concern.

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"This is a very strong message from the top to say we have to follow the standard procedures more closely," Mr Arashima said in an interview with the Financial Times.

The quality drop began to show up in independent research four years ago, when Toyota slipped to ninth place in the JD Power initial quality survey in the US. After three years behind GMs' Buick brand, it recovered to fourth this year. But Toyota's prestige took a knock as it was beaten by South Korea's Hyundai, previously known for low prices rather than quality.

As Toyota pursues rapid expansion its executives believe resources are stretched dangerously thin. Few believe Toyota is deliberately sacrificing quality in its drive to overtake GM, the world's largest carmaker. But executives admit the breakneck pace of expansion means it has more and more new staff who do not understand the "Toyota way". It takes 15 years to absorb the Toyota way, says one executive. "We don't have a fast-track system." The company is making great efforts to drive home the message that quality should be "built in", not imposed afterwards by management. New training centres have been set up in the UK and US, and every new factory has a parent plant at home in Japan that teaches new workers and managers the ropes.

Toyota does not have to look far to see the dangers of further missteps. Mitsubishi Motors was almost forced out of business by a scandal surrounding the cover-up of potential fatal vehicle defects and Nissan had to send a hit squad of 200 Japanese engineers to the US after the botched launch of a factory in Canton, Mississippi and three new models.

As US and European rivals begin to put quality at the heart of their business plans, Toyota knows that it needs to do better if it is not to lose its unique selling point.