Toyoda says sorry to China

• Source: Global Times
• [03:56 March 02 2010]
• Comments

Toyoda had failed to make any speedy public appearance for two weeks after the recalls began in the US, the No. 1 market for the company, but it then held three press conferences in Japan before heading overseas. Members of US Congress alleged that Toyota knew about the sticky accelerators for years but was slow to respond until it was forced into action by US transportation safety authorities.

Toyota's sales in China surged 53 percent year-on-year in January, but the recalls have already dampened demand, the Tokyo-based Nikkei Business Daily reported.

A large majority of Chinese car consumers – 74 percent out of 500 car owners and potential buyers consulted – are aware of Toyota's present difficulties.

Almost two out of every three consumers acknowledge that their confidence in the Japanese carmaker has been affected (62 percent) and that the current recall practice degrades their image perception of Toyota (64 percent), according to a survey by the Shanghai-based consultancy TNS Research International.

Meanwhile, a majority of online users who participated Monday in a sina.com poll – 71.9 percent of the more than 190,000 respondents – claimed they would boycott Toyota in the wake of the safety scandal, while 17.6 percent of respondents voiced continued favor toward the brand.

Zhang Lin, a 32-year-old computer programmer in Jinan, Shandong Province, said he would switch to a domestic car brand as Japanese cars have already lost their competitive edge after the massive recall.

"Customers in China seem to be exposed directly to carmakers whenever quality problems occur," Zhang said.

Yuan Gangming, an economist at the Economics Institute of the Chinese Academy of Social Sciences, said Toyota feared that the quality crisis would spread to China and become more complicated, due to the company's negligence in the US.

"China lacks a proper mechanism for public hearings to deal with such issues, but the consequences would be extremely serious if public anger were exacerbated, and it may evolve into trade and even diplomatic disputes between Japan and China," Yuan said. "What Toyota is considering is not only its business interests."

Toyota had learned from its mistakes made in the US, that's why Akio Toyoda came to China first, although Canada had asked to hold a hearing, Yuan said.

"It's not right to say Chinese customers are not as picky as US customers, but relevant departments paid much attention to attracting foreign investment and seemed to have always spoken for the enterprises, while neglecting and even suppressing consumer voices," he said.

Zhou Shijian, a senior researcher at the Institute of Sino-US Relations at Tsinghua University, said that Toyoda came to China in an obvious move to appease Chinese customers, as he pays great attention to the Chinese market, which is huge and rapidly growing.

Chinese customers still take Toyota's safety crisis as a business issue, instead of another sign of national conflict, which displays a more reasonable and moderate attitude of the public to issues between China and Japan, Zhou said.

Toyota, which produces cars in China with FAW Group and Guangzhou Automobile, sold 709,000 cars in China last year. But that accounted for a relatively modest 5 percent of the market. And sales in China account for a fairly low percentage of Toyota's world market.

Thirty-two automakers issued 56 recalls in China last year, involving 1.36 million vehicles. Toyota's four recalls accounted for nearly 75 percent of all recalled vehicles.

Toyota did not make it into the top-10 best-selling models by brands in China in January, whereas its Corolla and Camry models scored ninth and tenth respectively in the annual rankings in 2009, with 157,500 and 156,200 respectively, according to China Association of Automobile Manufacturers.

Toyoda vowed to take safety "to the next level" during a meeting Thursday with the head of the US Department of Transportation.

Toyota said the company still eye to sell 800,000 vehicles in China this year.

Toyota's February sales by its two local joint ventures with state-owned partners were up from a year earlier, according to Passenger Car Association estimates.

Sales for its venture with Guangzhou Automobile Group climbed 50 percent to 17,500 units. Sales at its FAW Group venture jumped 106 percent to 40,400 units.

Kang Juan and agencies contributed to this story