Global General

Toyota apologizes to European consumers

(Agencies)
Updated: 2010-03-02 14:15

GENEVA -?Toyota Motor Corporation continued its worldwide damage-control campaign with an apology issued by Vice Chairman Kazuo Okamoto to the automaker's customers in Europe for its safety issues and the concerns that they have caused.

A staff cleans the Toyota booth during a preview day of the upcoming 80th Geneva Car Show at the Palexpo in Geneva March 1, 2010. [Agencies]

Okamoto's apology on Monday, read to journalists on the eve of press days at the Geneva Auto Show where Toyota will unveil its hybrid Auris HSD compact and the Lexus CT 200h, a compact hybrid hatchback - follows public apologies by Toyota President Akio Toyoda in China and the United States.

Analysts said going into the Geneva Auto Show that Toyota would have to do more than show appealing new products to win back customers, but it will have to persuade consumers it is taking steps to identify all safety issues and correct them and any systems.

Okamoto pledged that the automaker is "taking a fresh look at every process in our operations," including design, manufacturing, sales and service.

Toyota has issued global recalls totaling 8.5 million vehicles since October for sticky gas pedals, faulty floor mats and glitches in braking software.

Though it is the world's largest automaker, Toyota's position is far less dominant in Europe than it is in the United States.

The Japanese automaker has just a 5 percent market share in Europe, a very fragmented market with many national brands winning favor with domestic consumers, like Volkswagen in Germany, Fiat in Italy and Citroen and Renault in France.

Speaking later to reporters, Okamoto said Toyota never set out to become the world's largest automaker, but that the company viewed the achievement as consumers' response to Toyota's quality. But he acknowledged that the recalls have forced a rethink not on the company's size but its response.

"From now on, when we have customers coming to us to say we want to have your car delivered to us, maybe now we will ask them to be more patient so we will really give them optimal quality," he said.

Among the underlying issues that have emerged from Toyota's quality issues is that the automakers' regional entities did not communicate enough with each other to allow earlier identification of issues.

Toyota Europe CEO Tadawshi Arashima said new regional committees with power to issue their own recalls will give Europe more autonomy. About 20 European executives will be on the company's new special committee for global quality, chaired by Toyoda.

There's no question European sales will be hit, Arashima said, but it is difficult to forecast how much. Not only will the figure be impacted by the recalls, but they will be hit by the discontinuation of scrappage incentives in Europe. Italy, Greece and Germany all have ended theirs, while France is phasing its out.

"The people will come back or not based on the way we will treat the problem," said Didier Leroy, head of sales and marketing in Europe. One key is allowing customers to quickly identify if their car is one with a problem, and then getting problems fixed as quickly as possible.

Out of 1.7 million cars recalled in Europe in late January for sticky accelerators, 200,000 have been fixed, Leroy said. And of the 42,900 Prius whose brake software is being replaced, Toyota Europe has changed the software in 15,000.

Leroy said Toyota's European sales were "not so good" in February, due to the impact of the recalls, which tied up Toyota deliveries for up to a week in some places, as well as uncertainty surrounding whether scrapping incentives would be extended in Italy and Greece - where ultimately they were not.

Sales are also way down in Germany, where Leroy said the trend is pointing to a slide in sales of 1 million this year, from 3.7 million to 2.7 million.

Analysts expect car sales in Europe overall to be down by 2 million this year.