For Toyota, the recalls keep on coming. Toyota, after dealing with the faulty brake pedal issue affecting cars listed below and the Prius braking issue (today I actually heard a squeaky break on a Prius while walking down the sidewalk), announced last Friday that it is to recall Tacoma pickups with faulty drive shaft components. While the maker of these components also supplies Nissan and Ford, it seems only Toyota is having problems with them.
Toyota 2009-2010 recall list (as of Feb 12, 2010) found on www.toyota.com/recall
* 2005-2010 Avalon
* 2010 Prius
* 2007-2010 Camry
* 2009-2010 RAV4
* 2009-2010 Corolla
* 2008-2010 Sequoia
* 2008-2010 Highlander
* 2005-2010 Tacoma
* 2009-2010 Matrix
* 2007-2010 Tundra
* 2004-2009 Prius
* 2009-2010 VENZA
According to Toyota’s website, they are “doubling their quality control efforts across the company.” While that may be the case, Toyota’s near impeccable record for quality has been shattered through this barrage of recalls.
Surprisingly, Japan is acting defensively towards requests for the Toyota leader Akio Toyoda (Toyota) to testify before US congress concerning the string of safety problems and Foreign Minister Katsuya Okada warned that relations between Japan and the US may suffer. This also comes at a time when Japanese are protesting the US base on Southern Okinawa, and the Japanese government has put unfair rules giving tax incentives for buying ‘certified green’ cars, none of which are American.
The bright side of this story is that Ford and GM are increasing market share, which should help the US economy as Ford and GM are both American companies despite Toyota hiring locally to decrease tariff rates on cars sold locally. While Japanese cars populate half of the street one will be hard pressed to spot even a single American-made car in the streets of Japan (this is from personal experience). GM, which has undergone bankruptcy and is effectively owned by you the taxpayer, will hopefully emerge a leaner, more technologically savvy player after the experience of management change and reducing its lineup.
Investors who wish to bet on an American car company pretty much have one option: buy Ford (NYSE:F), its stock price has increased over 450% in the last year and 35% in the past 3 months. I would steer clear of buying Toyota stock (TO) as it has not been performing nearly as well as Ford.
History of Toyota
Toyota was founded in 1937 as a spin off from the founder’s father’s company Toyota Industries. Vehicles produced by Toyota Industries were exact copies of the American Dodge Power Wagon and Chevorlet models, and parts could even be interchanged. Toyota supplied vehicles for the Imperial Army during WWII, and was only spared because of Japan’s surrender a few days before a scheduled bombing of Toyota’s main factories.
After the war Toyota committed to making civilian vehicles for Japanese, and in the 1970’s oil crises Toyota started to seriously compete with US automakers thanks to their fuel economy.
In 1997, Toyota created the best-selling hybrid the world had ever known, the Prius.