There is nothing on the Toyota Motor Corp.'s (NYSE: TM) U.S. website about a recall of 2.8 million cars for steering and water pump problems. Or, if there is a note, it is carefully hidden. The same absence holds true for the Toyota corporate website. It is as if the recall had not happened at all.

But the recall has happened, and it includes Avensis, Corolla and Prius vehicles sold in Europe, Japan, and the United States. Someone designed the cars and felt certain there were no faults. Why else put them into plans and onto roads.

This is not the first large recall in Toyota's recent history. This year, Toyota recalled 7.43 million vehicles for faulty power window switches. Huge global recalls in 2008 severely hurt Toyota's brand. All these recalls create a very large list of defects, which numbers well over 10 million.

But the Toyota history of recalls is old news, and the problem is not unique. American car companies have suffered from similar problems. So have cars from higher end manufacturers like BMW, which recalled 45,000 of its immensely expensive 7 series sedans. A car that costs $70,000 should be recall proof, or at least come with a "money back guarantee."

The worry that the recent spike in recalls creates is that as auto manufacturing technology races ahead, it does not create fewer defective products, and in many cases, safer ones. Robots may build cars faster and have an advantage over human-based assembly. That means the roots of these recalls are almost certainly with designers and engineers, who prepare all the details and plans for cars or light trucks long before parts are bought and the vehicle is assembled. Design factors have not improved, even if assembly has been made more modern.

Whatever the cause, even though quality ratings for many cars have gotten better most years, the consumer has to harbor a nagging worry. The new vehicle he drives off the dealer lot already may be broken, and the people who designed it will not know until after it fails.

Douglas A. McIntyre


Filed under: 24/7 Wall St. Wire, Autos Tagged: featured, TM

Increase your money and finance knowledge from home

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum