Eversheds comment: Latest Toyota recall resurrects questions over rapid expansion strategy

• United Kingdom

15-10-2014

Commenting on news that Toyota is recalling 1.75 million vehicles over fuel and brake system issues, Peter Shervington, expert in product liability at law firm Eversheds, says:

"Undertaking a consumer recall is a major step for any manufacturer – the direct costs of contacting vehicle owners, disseminating information through dealer networks and informing regulatory authorities around the world are substantial. In the long run, the negative impact on brand image, morale and investor confidence can be very much greater.

“This is yet another in a long line of high profile recalls which Toyota has had to undertake since the notorious floormat/hybrid system issues which sparked three recalls in quick succession in 2009 and 2010. Most major carmakers undertake recalls from time to time. For Toyota, however, the facts speak for themselves: of 22 million vehicles recalled in the US last year, more than 5 million were Toyotas. Each announcement puts another dent in Toyota’s efforts to recover its reputation and resurrects questions about the impact of its strategy of rapid expansion on traditionally enviable standards of design and production quality.

“The fact that Toyota is not aware of any injuries or fatalities caused by the issues to date will be of little comfort to the company, particularly given the increased risk of fire associated with the fuel system issues it has identified. The recalls with inevitably provoke much soul-searching within Toyota and its dealer network as to how further safety risks, in this case relating to vehicles produced as long as 7 years ago, could have slipped through the net.”

• Peter Shervington
• Principal Associate
• +44 113 200 4043
• +44 113 200 4043

< Go back