Toyota Motor (TM) plans to increase the time it takes to bring new vehicles from development to market in an effort to boost quality, according to reports. The beleaguered automaker is instituting the program, which extends product development by four weeks, after a string high-profile safety recalls that have smudged Toyota's image for building safe, reliable vehicles.
"The fast growth of the past decade has been too much in some areas for the company to keep up with," Executive Vice President Takeshi Uchiyamada told reporters Wednesday at the company's headquarters in Toyota City, Japan, Reuters reported.
Uchiyamada, in charge of research and development, said Toyota had assigned about 1,000 engineers, out of a staff of nearly 14,000, to deal specifically with quality issues. The effort will also result in fewer contract engineers, meaning more work will be done in-house to improve quality control.
A senior Toyota executive recently told The Wall Street Journal that 30% of its engineers are contract workers and that the company aims to reduce the number to 10%. It takes Toyota about 24 months on average to bring a new vehicle to market in Japan, Uchiyamada said. The time frame varies somewhat in other markets, including the U.S.
A Tumble in the Quality Ratings
Toyota products were once the industry benchmark for quality and innovation. But that reputation has been tarnished by its recall of nearly 10 million cars worldwide, mostly to address problems related to unintended acceleration. In J.D. Power's latest survey of consumer views of initial product quality, Toyota tumbled to No. 21, down from sixth place last year.
Just this week, Toyota began recalling 270,000 Lexus cars to repair faulty valve springs that may cause the vehicles' engines to stall. About half of those cars, which involve some 2006 through 2008 models, were sold in the U.S. Two weeks ago, the company announced it was recalling 17,000 Lexus HS 250h hybrids in the U.S., after federal auto safety documents showed that fuel spilled from the sedans during crash tests.
Toyota also faces continued scrutiny by Congress and the Obama administration over its handling of the recalls. Further, questions remain as to the cause of unintended acceleration in Toyota and Lexus vehicles, which the company has blamed on bulky floor mats that pin accelerators and "sticky" gas pedals.
Scores of Fatal Accidents
Toyota said electromagnetic tests continue to show no sign of any technical flaws that may cause unintended acceleration. Earlier this year, Transportation Secretary Ray LaHood enlisted the aid of scientists from the National Academy of Sciences and NASA to study whether such a phenomenon may be the source of the problem.
Unintended acceleration has been blamed for as many as 89 deaths and 59 injuries in accidents involving Toyota vehicles, according to the National Highway Traffic Safety Administration. The agency said in May it had received more than 6,200 complaints alleging acceleration problems in Toyota vehicles.
Improve your investing savvy with the right financial toolset.View Course »