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Toyota stocks took a big hit today, after the company announced it’s suspending US sales and production of eight popular models. Millions of Toyota vehicles already out there have also been recalled. The cars are being sent back to the shop to repair potentially defective gas pedals. Marco Werman talks with Leo Lewis, the Asia business correspondent for the Times of London. Download MP3
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MARCO WERMAN: I’m Marco Werman and this is The World, a co-production of the BBC World Service, PRI and WGBH Boston. Toyota stocks took a hit today. This after the company announced its suspending U.S. sales and production of eight popular models. Millions of Toyota vehicles already out there have also been recalled. The cars are being sent back to the shop to repair potentially defective accelerator pedals. Leo Lewis is the Asia business correspondent for The Times of London. He’s in Tokyo. Lewis says the recall is a big blow to Toyota’s image at home and abroad.
LEO LEWIS: This is an industry that lives on its image, the image of the brand and for Toyota particularly, that image has been driven by a sense of reliability, of quality control and so on. And this, of course, deals a massive blow to that. Reliability problems were never the area that Toyota thought that it would be fighting battles.
MARCO WERMAN: And does that sallied image of Toyota also have a knock on affect on national pride?
LEO LEWIS: Yes it does. Toyota sits in a very interesting position. It’s a company within Japan that is hugely respected, but not necessarily hugely loved. Other brands, one thinks of Sony and Honda, those are brands that are genuinely loved. Toyota is somewhat different. That is a brand that is hugely respected in Japan. They respect what Toyota did in terms of really ramping up mass production and of taking on the big Detroit auto makers. So yes, national pride is wounded, certainly because of reliability problems and the Japanese sense that they are the ultimate craftsmen, really. But there isn’t a great deal of national love for this company in the way there might be for other brands.
MARCO WERMAN: Toyota has a strong reputation, at least here in the United States; I’m sure in Japan too. You know, trailblazing the hybrid technology. But I’m wondering if this recall indicates bigger, deeper problems in the company that we don’t know about.
LEO LEWIS: I think with Toyota without making a great public deal of it was really very, very keen to steal that title of “World’s Biggest Auto Maker” from General Motors. So publicly they were quite discreet about it, they downplayed it. But my sense is that within the company they were really going hell for leather to try and get that crown. But I’m also hearing that in that process, there may have been compromises.
MARCO WERMAN: And the auto industry in this country certainly is still on very shaky legs after last year’s episodes. What do you think this is going to do to the auto industry as a whole in the United States? What’s going to be the fallout here? Could it lead to layoffs and what do you think it’s going to do to auto buyer confidence?
LEO LEWIS: Toyota does have a very great and considerable capacity to bounce back from this sort of thing. It certainly does have the marketing abilities to try and recapture some of that and to really present itself for what it is, which is a company with a great deal of cutting edge auto technology. I think also what’s going to happen is that Toyota is already being conscious of the fact that it needs to make up for lost ground in China and it may in some way see this situation as an opportunity to start again in one sense, with the brand and make China a bit more of a focus.
MARCO WERMAN: Toyota on the little islands of Japan certainly has a high profile image. You’ve visited Toyota city near Nagoya. What did you find there?
LEO LEWIS: Well Toyota city is the place that has grown up with the company. I’ve been to Detroit as well. The two cities really couldn’t be any more different. Toyota city is a place that has really lived for the whole process of total quality control. All the companies around the parts supplies, the people that make the carpets that go in the back seat wells and so on. Everyone in that city has been historically driven by that same sense that quality is everything. And you really do feel it when you’re there. Nowadays, it is a much more depressed place than it used to be. It’s not the same sort of visible decay that you would get in other cities around the world, but it certainly has a mood of disappointment, really, of things being not quite as great as they used to be.
MARCO WERMAN: Leo Lewis is the Asia business correspondent for The Times of London. He joined us from Tokyo.
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