While Toyota looks for an organizational solution to its diffuse product-quality issues, competitors seem to be benefiting with growing loyalty.
Toyota on Wednesday said it will appoint a chief quality officer for each principal geographical region around the world to make the company "more alert to customer sentiment." It says the officers will serve on the company's new Special Committee for Global Quality, which is to be headed by Toyota's president and meets for the first time on March 30. The company says it will ask independent third-party experts to review the contents of that meeting.
Toyota is also opening itself up to more customer input from each region so comments go directly to its Quality Group and to its Product Development Group. The initiative starts in the U.S., where the company will increase the number of its technical offices to be able to conduct on-site inspections within 24 hours of every reported incident of suspected product malfunction.
On the technical front, Toyota is also adding a brake-override system that kills the engine any time the accelerator and brake pedals are applied at the same time. The new technology will go in all future vehicle models worldwide, per the company.
Toyota has to move fast. According to Kelley Blue Book, the Irvine, Calif.-based automotive research and consumer shopping firm, brand loyalty has gone up for Korean and domestic automakers including Kia, Hyundai, Chevrolet and Ford. While non-Toyota owners are becoming more loyal to their current brands, Toyota brand consideration and loyalty have declined.
The firm says Korean import automakers have seen the greatest recent increase in loyalty and consideration, with Kia and Hyundai owners looking at new models within their respective brands increasing by 17.1 and 10.5 percentage points versus the fourth quarter last year. The number of Chevrolet and Ford owners looking at new models within their respective brands increased by 6.5 and 4.6 percentage points.
KBB says the number of Toyota owners looking at new Toyotas is down 6.5 percentage points to 51%, and owners of other brands likely to consider Toyotas are down five-to-eight percentage points. The firm says Toyota owners are also less likely to consider other Japanese automakers, including Honda and Nissan.
"This finding is the most interesting of all," said Jack R. Nerad, executive editorial director, Kelley Blue Book and kbb.com. "One might have guessed Toyota owners would switch their allegiance to other Japanese brands, but instead they seem to be turning away from Japanese brands as a category. It's just another indication of the far-reaching effects of these recall-related issues."
A loyalty study by Experian Automotive suggests that Ford and Hyundai were racking up brand loyalty last year, too. The firm says Ford accounted for four of the top five vehicles for customer brand loyalty from the second to the third quarter last year. Experian says Ford's Fusion, Edge, Flex and Five-Hundred models were all within the top five vehicles for customer brand loyalty. Ford Freestyle had the 10th-highest brand loyalty.
Still, Toyota's Venza model had the highest brand loyalty at 63.2% and Toyota's Prius and Camry were seven and nine, respectively. When it came to corporate loyalty, Toyota moved ahead of GM to take the top spot. Ford followed closely in third place. Hyundai's corporate loyalty rose to fifth overall.