Global automobile giants like Toyota and Honda created a furor among their customers by announcing massive car recalls. Toyota plans to recall more than eight million vehicles while Honda has to recall more than one million. Toyota says that the drivers of these vehicles have reported unintended acceleration of their vehicles which is caused by the improper design of the pedal and the floor mat. Honda vehicles are facing problems with airbags and a switch which could cause fire. To rectify these defects a massive reverse logistic exercise will cost them millions of Dollars.
Why did it happen?
In-spite of stringent safety and security checks on vehicles before going to customers, some defects crop up only after extensive use. However, in this case the issue should have been rectified during the initial testing. Organizations take a call in drawing a line beyond which they assume that the cost of improvement is much higher than the cost of failure. Is this the case? or it is the inefficiency of the automobile manufacturers to detect such visible problems? or do we require Sherlock Holmes?
Impact of such major recalls:
Historically, Cadillacs in 1960, Ford SUV in 2000 because of Firestone tires, Yo-Yo toys in 2003, Cadbury in 2006, Sony notebooks in 2006 and now Prius, are some of the major global recalls of the industrialized world. It is interesting to see that post recall there is a sense of excitement among the customers that the company really cares about them. The kind of massive media coverage they get increases their brand awareness tremendously. But if not managed well it may hurt the brand deeply. There are two possibilities, one that the brand succeeds in building the invaluable trust in their customers and second the trust can shift towards the competitors. In the case of Toyota, it somehow seems that the brand will strengthen because of the numerous apologies and actions taken post recall decision. If they implement the recall successful within the committed time frame, the loyalty towards them would increase. This will give a sense of confidence to the users that the company walks the talk.
Rogues
