Eversheds comment: Toyota recalls nearly 3 million vehicles

• United Kingdom

14-11-2012

Commenting on the latest product recall from Toyota, Richard Matthews, head of product liability at global law firm Eversheds, said:

"Recalls in the automotive sector are not rare events, however this adds to an increasingly long list of major recalls undertaken by Toyota in recent years, and follows hard on the heels of a 7 million vehicle recall announced in October. The Japanese giant faced heavy public scrutiny for the way it handled recalls in 2009-10, culminating in a record fine of $16.4 million from the US Transportation Department. Toyota’s approach this time around is perhaps indicative of an increasingly ‘belt and braces’ approach to managing risk. It clearly recognises the benefits of proactive communications with its customer base where its reputation is at stake.

"The recall comes at a time when the brand is already experiencing trading issues, with anti-Japanese sentiment taking hold in China – one of the manufacturer’s key export markets. Although Toyota’s brand has proved remarkably resilient: in August it announced a quarterly profit of Y290bn, the highest in four years, and the business still claims the top spot for global sales, with 4.87m units sold in the first half of 2012.

"Drivers understand that recalls happen in this sector. As long as the affected vehicles are fixed quickly with the minimum of disruption, it is unlikely that there will be any significant impact on brand loyalty. That said, their patience may start to waver if Toyota continues to be in the news for the wrong reasons."

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• Richard Matthews
• Partner
• +44 113 200 4372
• +44 113 200 4372

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