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IS THE CAR IN FRONT ...STILL A TOYOTA?

By John Hunt

The Japanese giant took a buffeting at the hands of the media earlier this year with very high-profile and damaging publicity being heaped upon the brand, especially in the US. But how is business in Qatar for the world’s number one carmaker? Qatar Today gets the local angle

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Qatar Today september 10

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ot entirely unexpectedly, the opening gambit of, ‘It’s not been a good year...’ cut little ice with the Abdullah Abdulghani & Bros., the local dealers of Toyota Motor Corporation (TMC) representative I met at Doha’s Toyota Tower late last month. Arguments as to the media’s role as a reflector or director of public opinion are perhaps a touch too much in this context but it’s undeniable that TMC got figuratively hauled over the coals in the West with regard to a number of technical issues relating to the safety of its cars. What have been the local repercussions of the media storm elsewhere?

Late last year and into the early part of 2010, TMC identified three separate technical issues with some of its vehicles, the most serious of which involved the potential sticking of the accelerator and unintended acceleration as a result. TMC snappily named this defect as ‘Sticking Accelerator Pedal’ and once the dust had settled, 9.9 million vehicles worldwide had been recalled by TMC and the company’s products had been linked with 37 fatalities in 29 incidents (source: USA Today). Multiple lawsuits are pending against the company.

Toyota and Lexus (the luxury badge of TMC) vehicles are everywhere in Qatar, sold exclusively here by Abdullah Abdul-

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“if anything, the way in which we reacted to the technical issues with the service campaign has increased our customers’ confidence in us”

ghani & Bros, which has supplied the vast majority of the approximately 100,000 TMC vehicles on the country’s roads.

Sales of the marques in 2009 topped 19,000 units and will exceed that figure in 2010. “We're seeing a big increase in sales this year, up by between 20 and 25%,” he said. That might be considered slightly surprising in light of the above, but our respondent didn’t seem to think so.

We don't recall...

When asked about the recall in Qatar, the first thing we learn is that, in Toyota's world, there is no such thing as ‘a recall’; the process of addressing technical issues with purchased vehicles is known in newspeak as a ‘service campaign’. “The problem with the sticking accelerator was not as much of an issue in the Middle East as it was in the US,” said TMC’s spokesman. “Nevertheless, Toyota Qatar immediately initiated a full service campaign to identify the affected models, the number of these models in the country and complete and transparent liaison with the customer to address the issue. We concluded that there were approximately 1,200 cars sold here that required our attention, just under 1,000 of the Avalon (above), and 200 of the Sequoia model type.

“Newspaper advertisements ran in both English and Arabic dailies and we also called each of the initial purchasers of the vehicles. We were surprised to learn 56

Qatar Today september 10

that many of these vehicles – purchased since 2002 – had left Qatar. This is an affluent country and we’re seeing an average of just three years’ ownership for the person that buys the car before reselling it. Typically the second owner will keep it for two years and thereafter many cars leave Qatar for destinations worldwide,” he said. “For those owners whose vehicles required attention, it was a 20-minute job.”

Essentially with this response the ground was being prepared for an answer to the next enquiry, whether the brand image had been damaged in Qatar. “Toyota’s relationship with its customers is very strong. We feel we get great brand loyalty from our customers. They believe in us and the quality of our product. If anything, the way in which Toyota reacted to the technical issues with the service campaign has increased our customers’ confidence in us.

Never a crisis

“Local customers got inured to the ‘drip drip drip’ of stories every day about TMC. Sales have increased, not decreased. We see the situation as an opportunity to further the quality control of the brand. We’re trying to build more positive PR in terms of the brand's search for a ‘zero-defect’ product. Global sales are up by percentages of double-digits not only in Qatar, not only in the GCC,

but worldwide. This was never a crisis,“ he added.

“The level of local support we have had in Qatar has never wavered. The outlook here is very positive and we have ambitious plans for growth here.”

I guess that’s a ‘no’ then.

While we talked about the media coverage that TMC had endured in the US, it was implicit that there were perhaps other factors at play in the sustained level of negative publicity. Could Toyota’s being a Japanese company establishing primacy in a US market have had something to with the intensity of the media scrutiny in the US? Few people can answer that for sure but it's not a huge leap of faith to suspect a connection.

We can learn, though, that Toyota – from its own perspective at least – appears to have emerged from the situation intact and with sales on the up locally and globally. This neatly encapsulates the value of brand equity in bouncing back from adversity. The size of the organisation is a big help, sure, but there’s a lot to be said for the strength of the brand and customer confidence in the same.

It also demonstrates that global media may not be as powerful a weapon at local level as it might imagine or aspire to be. While the US frothed and outraged, many markets decided that they knew what they liked, and that they liked Toyota and Lexus cars n