The famous Prius hybrid has been picked to lead Japan’s Toyota Motor Corporation out of the doldrums, as both the company and its country fight to recover from an awful year in which the triple-whammy of earthquake, tsunami and nuclear disaster laid waste to large areas of the country and its economy. Many of the Asian nation’s manufacturers have restored their own production capacity to pre-quake levels but the global economic recession, the strength of the Yen and problems with suppliers are making life extremely difficult for a country that not long ago led the world in everything from technology and consumer goods to mass manufacturing and heavy industry.
A few years ago, Toyota stamped its authority on the world’s auto industry when it wrested the crown of “world’s number one car company” from the USA’s General Motors. Since then, a raft of scandals involving quality control and cover-ups at Toyota, as well as several other Japanese companies, has damaged both the morale of Japanese workers and public perception of the country’s once-hallowed reputation for quality.
Seeking to pull itself out of the mire, Toyota has announced that it is focusing on its hugely successful Prius. Apparently, it’s not necessarily because the company looked at all of its products and decided the Prius was the only way forward.
In fact, Toyota essentially admitted that it is struggling to bring total production capacity back on line and has been forced to invest its energy in the most popular cars it produces. The idea is that devoting energy now to sourcing materials and components to production of the Prius and hybrid models under the Lexus brand will be the most effective way to recover production of its most popular models.
Toyota is doubly keen to get Prius output back up to speed. The company has been burning through its cash trying to rebuild its supply and manufacturing network but many Japanese suppliers simply aren’t back in operation, either at all or at the levels needed.
Even worse, on several scores, is the fact that General Motors has just emerged from bankruptcy, following its bailout by the US government in 2009, and found itself back in the position as the world’s leading producer of automobiles in the first half of 2011. This is probably due in great part to Japan Inc having had its production capacity devastated by the earthquake earlier this year but as both Toyota and Japan seek to recover, they are left extremely vulnerable to progress being made by competitors based everywhere from Europe and the USA to South Korea.
While Toyota endeavours to rebuild its market share on the back of the mighty Prius, the company also has to address the perception that it allowed the quality of its products to slide dramatically in recent years. It is inevitable that Toyota’s huge success left it vulnerable to some spotty problems with suppliers but there has been at least a whiff of cover-up about some of the more notable product recalls, particularly in the USA, where many questioned how long it took the company to address concerns raised by both customers and several motoring bodies.
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