Toyota (TM) President Akio Toyoda announced that a brake override system will be added to all of its new cars. The enhancement to the company's vehicles will cut engine power when a a driver hits the brakes and accelerator at the same time. Toyoda also said he would appoint a global quality committee made up of the chiefs of quality from all of the firm's major sales regions.Toyota faces the issue of whether consumers will care about the new actions. The U.S. government had put more pressure on the company to turn over documents about accelerator and brake systems in vehicles that have been recalled. According to the FT, the total amount of class actions against Toyota in the U.S. has already reached $3.6 billion. That number is almost certain to rise.
The announcement of the new brake system may do little to bring back Toyota customers. American consumers have a wide choice of models made by domestic companies and manufacturers from Korea, Japan and Europe. A decade ago, Toyota buyers were drawn to the firm's cars because of the perception that they were built to higher quality standards than U.S. vehicles. This perception was borne out by studies from firms including JD Power and the research arm of the Consumer Union which publishes Consumer Reports. But most recent surveys show that the quality of U.S.-made cars has matched that of Japanese vehicles, including Toyota.
Consumers may also be wondering why Toyota needs to put override systems into its new cars. If all of the vehicles from the world's No.1 car company are built correctly and to the highest mechanical specifications, why is an additional safety system necessary, and why wasn't it put on Toyota models built over the last few years? Toyota almost certainly will not answer that question.
Take the first steps to building your portfolio.View Course »