Toyota's Damaged Reputation & Someone is Making Kimchi Out of the Competition

Toyota is in a tailspin on the heels of a historic recall notice and being #1 is a very lonely place. Toyota's reputation is based on quality and safety. There is no love or inspiration felt from envisioning myself behind the wheel of a Camry. Now a Lexus LF-A, well of course! I just have to remind myself that this boutique vehicle costs an estimated $400K. A little out of reach for the average, safety conscious consumer. And hey, no room for a child safety seat!



It is easy to criticize Toyota's efforts as the company met it's goal to be the #1 automaker. Their reputation propelled them there, allowed customer retention, and afforded those Toyota owners a glimpse at the gateway drug known as Lexus. Is all lost? Of course not! Toyota has done much to ingratiate itself to the American public by offering "quality" vehicles and employing Americans. And this recall is set to be costly, estimating a parting of ways with hundreds of million of dollars. So will consumers turn their backs on this beloved brand? Probably not, but it is difficult to tell, as consumers are turning their backs on automotive sales in general.



What can be said is that this is perfect timing for Korean brands like Hyundai and Kia. Hyundai is in a position to dominate the market with quality vehicles that have the features and style the public wants. Think Hyundai Genesis and think impressive financing terms in a tough economy. The North America Car of the Year has helped garner that street cred, and even I can see myself behind the wheel of one.

So is all lost? Of course not, I mean Toyota isn't GM. Consistently, GM leaves me uninspired and I grow weary of the "May the Best Car Win" marketing. I am not buying it and auto sales are showing similar results. I still think the "best car" may just have a little more Seoul than any other automaker ever saw coming.

Throw a TARP on it! How we never meant to pay back the government bailout monies!

Color me amazed at GM and their announcement of unbelievable profits! Well, profits may be too generous a term, but hey, they didn't lose as much money as they thought! Fritz Henderson shared today that a $1.2B loss was better than expected. Huh...what was that!?!? Were they on target for a $4B loss? Why not round up, way up...

In the advent of such a bold announcement regarding profits, it was nice to discover that by enacting TARP (the Troubled Asset Relief Program), the government never really expected to get repaid. The Department of the Treasury shared that bailout recipients like Chrysler and GM would have to be more profitable than at any other time in each company's respective history. Theses two automakers owe an estimated $65B in total (GM at $50B and Chrysler at $15B). Water under the bridge, as American consumers are left wondering where they can purchase a Pontiac, Saturn, or Hummer.

In retrospect, it is nice to know that the one-time members of Detroit's Big Three have a plan to pay back the moolah. Well, use of the term "plan" can be substituted for a line in a Popeye cartoon, "I will gladly pay you Tuesday for a hamburger today." Of course, any "profits" are coming from those emerging Asian markets as Americans may not be falling for Ed Whitacre's "May the Best Car Win" campaign. Hmm..the best car...well it sounds Korean and looks a lot like a Hyundai.