Toyota chief quits stalling and says sorry to the world

Grandson of car giant's founder finally addresses the scandal that has brought his family's firm to its knees
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The Independent Online

Toyota's embattled president finally gave the world what it was waiting for last night: a mea culpa.

Akio Toyoda, the grandson of the car giant's founder, appeared before cameras more than a fortnight after the first announcement of a recall over accelerator problems which has since extended to almost 4.5 million cars worldwide.

His only previous statement over the issue – made worse by a further glitch in brakes on some cars – had been a curt, low-profile statement of regret on the sidelines of the World Economic Forum in Davos, Switzerland. Yesterday, perhaps chastened by repeated calls for his appearance, the tone was rather different.

"I deeply apologise for causing trouble to many of our customers over recalls for multiple models in multiple regions," he said, reading from a prepared script as cameras popped and flashed. He admitted Toyota was facing "a moment of crisis" and he promised that he would fight to "win back trust in the beleaguered company".

But some observers yesterday suggested that the gesture was too little, too late. "He should have come out a week ago," said Masaaki Sato, a car industry expert who has written on Toyota extensively, on Japanese television. "After all the foot dragging, he was pushed into a corner."

And the delays prompted a forensic examination of Mr Toyoda's statement. The company president bowed in customary greeting when the conference began, but he did not make the apologetic bow familiar from past corporate Japanese apologies. He initially made to leave without answering questions, only expanding on his remarks when pressed to do so by reporters. "Believe me, Toyota cars are safe," he said. "We always put the customer first."

In an attempt to prove that point, the company yesterday announced a new quality control committee that would respond directly to the president so that the crisis is not repeated. The task force will involve outside experts monitoring the company's quality assurance process – an unprecedented step. But it may be too late to staunch the company's losses, which are already estimated to be $2bn (£1.3bn)in expenses and lost sales.

Anxious to avoid the further recall that would be a hammer blow to the company's reputation yesterday, Mr Toyoda said that he was still deciding what to do over the brake problems that have now emerged with the 2010 Prius, although the Japanese transport minister had earlier hinted that a recall was inevitable.

Toyota's managing director in the UK, Miguel Fonseca, echoed his Japanese superior's indecision, asking for more time to make a decision. "It's still early hours and early days," Mr Fonseca told the BBC. "There is still an investigation going on with the relevant authorities."

There have been no reports of accidents caused by the faulty brakes in the UK, but four drivers in the US have reported crashes believed to be linked to the new defect, and a further 120 have reported the problem with the third-generation Prius to the US National Highway Traffic Safety Association. Doubts about the safety of the hybrid Prius, beloved of greens and Hollywood stars, would be a particular blow to the company's reputation as an innovative manufacturer.

But this is not the first such issue to hit the now-beleaguered car firm, which had previously enjoyed a remarkably rapid ascent from mid-table status to claim the largest single share of the world car market. Shortly after announcing its first full year loss in 71 years in May last year, it issued the first in what became a string of recalls, warning that 690,000 vehicles could be dangerous because of problems with window controls.

It has since extended recalls to an estimated 8 million cars, and earlier this week it suspended UK deliveries. But it has insisted that the problems – which involve sticky accelerator pedals in some vehicles, and a temporary loss of braking power in others – do not pose a threat to drivers' safety, saying that drivers can still use their vehicles unless they hear from the company.

Since the 21 January recall, Toyota's shares have lost about a fifth of their value, or $30bn. They did pick up from a 10-month low yesterday, rising a little at news of better-than-expected quarterly results. But that was scant consolation for Mr Toyoda, who issued a plea to investors yesterday to "continue to support us with a long-term view".

Driving a corporate legend: Akio Toyoda

"I will assume the heavy responsibility of navigating Toyota through an unprecedented crisis like which we've never experienced in the past 100 years," Akio Toyoda told reporters when news of his elevation to the president's chair was announced. "I just feel sobered by the heavy responsibility." That was a year before the Toyota accelerator crisis exploded. One can only imagine the weight on his shoulders now. The 53-year-old, the third member of the Toyoda family to run the company founded by his grandfather Kiichiro in 1937, had long been groomed for the top job. He took over in June last year, ending a 14-year spell without a member of the Toyoda family in the driving seat.

Nicknamed Oji ("Prince" in Japanese), he likes to race cars and has completed 24-hour endurance competitions. But he is not one for the limelight. His public appearances have been rare and usually in controlled situations. Having been at the firm for 25 years, Toyota runs through his veins. According to his biographer, Aiichiro Mizushima, he deserves the credit for introducing a successful navigation system, and putting Toyota ahead of its rivals in the Chinese market, despite its late arrival there. Before he became president, he served as executive vice-president, where he was responsible for foreign component procurement. It is Toyota's diversification of procurement beyond its tried and trusted Japanese network that is blamed for its current problems.

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