There is an adage that goes: “If something can go wrong, it will.” Now that Toyota Motor Co. is near or on the top of the summit as far as new car sales are concerned, it's being hit with all sorts of problems.
- High rate of recalls on its vehicles with the most recent to be the oil sludge problem.
- Severe skills shortages, especially in management.
- Heavy Third World competition as competitors farm work to low labor cost countries such as Mexico and China.
Analysts are blaming most of Toyota’s latest problems on the fact that it has grown so much in so short a time. The automaker is pushing to achieve its goal of 15 percent of the global market share, up from 12 percent. Do meet it, Toyota has constructed an average of two plants a year. It is estimated that, by next year, Toyota, its production will roughly equal to the entire annual output of Volvo.
Then there was the most recent "oops" with NASCAR. Toyota wanted to make a major presence at this year’s NASCAR series races both for the publicity in its own right and to show that it is an American company. The company was able to enlist drivers Waltrip and Dale Jarrett to drive its cars.
But the Thursday before the race, Waltrip was caught trying to super charge his Toyota Camry with a suspected jet-fuel additive. NASCAR allowed Waltrip to compete in the race using a back-up car but it impounded the Camry, docked him some points, and suspended his crew chief and manager for the race.
Our take? Toyota finds that it has to re-invent itself again. It needs to conceive new methods of cutting manufacturing costs without jeopardizing quality, recruiting designers who can engineer new cars that are of ultra-low cost for emerging markets. None of these, as it's discovering, is going to be easy. Only time will tell if a company from one of the emerging markets, say like Chery in China, will come up to bite Toyota just like Toyota is now biting GM. Stay tuned.