Wednesday, January 6, 2010

Toyota in Trouble

Last fall Toyota issued a recall to fix issues related to unintended acceleration on a majority of their cars and light trucks. The problem could have ballooned into the one that almost destroyed Audi twenty years ago. But instead of mechanical problems, faulty engineering, or demonic possession, the fault was attributed to floormats.

At about the same time, it was announced that Toyota is losing market share and posted quarterly losses--not to the level of GM, which Toyota eclipsed last year as the world's largest car manufacturer, but surprising all the same. More recently Toyota has announced they will begin cutting costs by lowering product content and using cheaper suppliers.

Uh oh.

We've seen this before with GM, Ford and Chrysler. And if Toyota follows the Big Three's model for making cheap cars and offering generous rebates, they too will be in trouble.

No comments:

Post a Comment