Unfortunately for Toyota, rumors of rampant incidents of unintended acceleration have been irresponsibly perpetuated by news organizations more concerned about ratings than facts. The L.A. Times has been particularly aggressive in their efforts to slander Toyota and stoke public fears. Two “news stories” have printed un-substantiated opinions as fact and used incendiary imagery to stoke fear in the hearts of Toyota owners.

While the L.A. Times isn’t alone in this practice, they’ve been leading the charge. Here’s what Toyota owners need to know.

NOTE: It should be stated clearly for all to hear that our blog isn’t living up to any high journalism standards. We were completely and totally wrong about the 2009 Tundra diesel and the Tundra hybrid…embarrassingly so. When we accuse other journalists of being “sloppy,” it shouldn’t carry a lot of weight. Still, the truth must be told.

When Toyota announced their voluntary recall in September, two reporters (we’ll call them V and B) began gathering data to see if they could embarrass Toyota somehow. Two weeks later, they published this story with the headline “Toyota’s runaway-car worries may not stop at floor mats.” The article hints that Toyota’s electronic control systems might be faulty, a very scary prospect that probably got their article a lot of page views…yet 6 NHTSA investigations have determined unequivocally that there’s no problem with Toyota’s throttle control systems.

Yes, that’s 6 separate investigations that determined Toyota’s throttle control system is completely safe. Yet the L.A. Times asks “Might a vehicle’s complex electronic features make it hard for drivers to react quickly when accelerating out of control?”

Obviously V and B have not driven one of the vehicles in question, because there’s nothing complicated about the gearshift, start button, or the function of the pedals. The only complexity is in the system behind these things…which is where the slander comes in. “Complex electronic features” insinuates there’s some sort of bug in Toyota’s throttle control system. Not true.

Additionally, many of the accusations leveled at Toyota in this article advocate that a person in a panic situation might not be able to control their vehicle. No kidding?! Panicked people aren’t rational. There’s no way to “panic proof” an automobile, and it’s not a reasonable standard when it comes to assessing safety.

V and B didn’t stop with the “runaway” accusations. Two and a half weeks later they published this story, which claims that Toyota and NHTSA are irresponsibly ignoring “1,000’s” of cases of runaway Toyotas. While the reporters make some interesting points, it’s hard to give V & B a lot of credit for being objective when they lead with this image:

The lead image for the L.A. Times second "runaway Toyota" smear story (click the image to see the original).

Talk about a smear job! That picture and the headline “Runaway Toyota cases ignored” make it look like a Toyota will plunge off a nearby cliff at a moment’s notice. Ridiculous.

It’s true that NHTSA and Toyota systematically exclude complaints without investigation, and the process may need a review. However, accusing NHTSA and Toyota of negligence in their response is irresponsible and incendiary. Here’s why:

• NHTSA (and Toyota) HAVE to figure out a way to disqualify some complaints as a matter of practicality. With tens of thousands of claims filed with NHTSA every year for every make and model on the road, NHTSA can’t investigate each and every complaint.

• Not all complaints are equal. Some people file a complaint with NHTSA because they really have a problem to report, and others complain because they’re angry with the manufacturer, because they’re trying to secure some sort of financial benefit, or because they’re trying to avoid prosecution. After all, it’s much easier to say “my car accelerated on it’s own” that it is to say “I was negligent.”

Specifically, let’s look at what types of claims were thrown out:

• Cases of unintended acceleration sustained for more than 1 second. Why? Because, according to NHTSA and their decades of investigation experience, most of these cases are the result of driver panic.

• Cases of vehicles that couldn’t stop. Why? Because, according to a NHTSA study from 2004, most vehicle brake systems can stop an out-of-control vehicle with ease. If there’s a point to be made in the L.A. Times article, it’s here. The results of the study are (obviously) not correct.

• Cases where the complaint isn’t specific as to the “cause” of the problem, meaning the owner didn’t register a specific enough complaint. When owners aren’t specific about their problem, their complaints are ignored.

So what complaints does NHTSA listen to? Complaints from safety experts, police investigators, auto repair professionals, and specific complaints that match an existing pattern. Since the year 2000, NHTSA has investigated Toyotas for unintended acceleration 9 times…seems like NHTSA is doing their job.

V and B do make some valid points. NHTSA’s processes could probably stand some improvement and Toyota needs to upgrade their vehicle computer systems. However, there’s no disputing that these articles are designed to scare people, and for that we say BOO.

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According to a limited and (admittedly) flawed NHTSA study, hybrid cars seem to hit twice as many pedestrians as non-hybrids in certain low-speed maneuvers. The reason? Hybrids are nearly silent when operating in electric-only mode.

Are hybrid cars REALLY stalking pedestrians? NHTSA says "probably"

Specifically, the study states that:

…[when] a vehicle is slowing or stopping, backing up, or entering or leaving a parking space, a statistically significant effect was found due to engine type. The HEV [hybrid electric vehicle] was two times more likely to be involved in a pedestrian crash in these situations than was an ICE [internal combustion engine] vehicle…the incidence rate of bicyclist crashes involving HEVs [hyrbids] was significantly higher…

The data that this report is based on was only taken from a small number of states (13) and over the course of a relatively short time period (8 years). Therefore, the study is far from conclusive (and NHTSA has said as much).

But do we really need a study to “prove” that hybrids hit more people? Doesn’t it seem sort of self evident? Ask yourself the following questions:

1. When walking, do you rely upon your ears to alert you to vehicles outside of your peripheral vision?
2. Have you ever honked your horn when backing out of a low visibility parking space, pulling into an alley, or coming around a corner in a parking garage?
3. If you’ve driven a hybrid, have you ever accidentally “snuck up” on a pedestrian and scared them?

Chances are good that you can answer yes to 2 or 3 of these questions…here’s why.

You’re a human who uses your EARS. Hearing is one of two really important senses that people use while driving. It’s why our cars have horns. It’s why ambulances have sirens. It’s why it’s illegal in most places to drive your car while wearing headphones. It’s why there are laws against really loud stereos and exhaust systems.

While hybrid advocates are quick to point out that the study results could be explained by poor visibility, and that the study data is significantly flawed, (and they’re right), do we really care? Isn’t it obvious that hybrids don’t make noise and that as a result some pedestrians get hit?

There are three options going forward:

1. Mandate that hybrids make noise via some sort of regulation.
2. Conduct a better study.
3. Do nothing.

Option 3 is probably off the table, but just for grins let’s consider it. While hybrids were 50% more likely to hit pedestrians according to the flawed study, the total incident rate was less than 1% of all vehicle crashes. In other words, as bad as it could be, it pales in comparison to other problems. Animal strikes (cows, deer, elk, etc.) injure FAR more people than hybrids hitting people in parking lots. Maybe our energy is better spent elsewhere.

Option 2 is less likely. Most people aren’t going to critically evaluate the current study, so they’re probably never going to learn that it’s flawed and that a better study is needed. Such is politics in America.

Option 1 seems most likely. It’s very easy for NHTSA and/or Congress to instruct auto manufacturers to add a noise maker to hybrids while operating in electric mode.

What do you think – which option makes the most sense? Is there an option missing?

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First reported in Japanese newspapers (and now on Reuters and PickupTrucks.com) it looks as if Toyota is voluntarily recalling nearly 3.8 million cars and trucks in order to fix and/or replace the accelerator pedals. If this is indeed the official “fix” (Toyota has yet to announce this formally), it’s a bit disappointing.

Since many Toyota vehicles have electronic throttle controls, a software upgrade to the engine management system would cure this issue. A software upgrade that prevents a vehicle from operating at full throttle whenever the brake is depressed would almost completely eliminate the possibility that a vehicle could careen out of control because of a stuck throttle. Chrysler and Mercedes-Benz vehicles with electronic throttles already have this feature – it’s called a “brake to idle failsafe” – but Toyota, Lexus, and Scion vehicles do not.

Toyota's gas pedal "fix" isn't the best solution for preventing run-away throttles.

New gas pedals are probably a cheaper “solution” to this problem, but they’re not the best way to solve the problem.

As you probably know, this all started when Toyota issued a voluntary floor mat recall in late September, 2009 asking owners to remove their driver’s side floor mats pending a more permanent fix. This voluntary recall was in response to a tragic accident involving an out-of-control Lexus that killed four people.

The Lexus that crashed was a loaner car provided by a California Lexus dealership. After a comprehensive investigation, NHTSA concluded that this accident was caused by an over-sized floor mat that interfered with the gas pedal. The floor mat (which was the actual cause of the problem) was not designed for the Lexus it was installed in, nor was it secured. While this accident was tragic, it was NOT a result of a design flaw. It was simply the wrong floor mat.

Nonetheless, NHTSA and/or Toyota have decided to make some sort of change to the design of the gas pedal. Perhaps there is evidence of a more severe problem, or perhaps Toyota feels this is the best way to resolve this issue with the public. While there’s no reason NOT to change the gas pedal design (it’s probably reduces the possibility of a stuck pedal), changing the engine computer software seems like a much better fix. After all, the notorious Lexus loaner car accident wasn’t caused by a poor gas pedal design. There were a number of factors at work:

1. The driver’s floor mats (one on top of another) were too large. It’s certainly possible a smaller pedal would have helped, but the news reported there were TWO floor mats installed, one of which was a big rubber all-weather mat designed for an SUV. Pedal size might not have mattered at all in this particular case.
2. The driver was unfamiliar with the vehicle he was driving (he didn’t know how to shut it off, nor how to put the vehicle in neutral).
3. The driver was in a state of panic.

In all likelihood, none of these problems could have been prevented by a smaller gas pedal. However, ALL of these problems could have been prevented by a software fix that prevented the engine computer from allowing simultaneous brake and throttle inputs. There aren’t any normal driving scenarios where a vehicle’s electronically-controlled throttle should stay open while the brakes are being depressed (that’s a racing-only situation).

In Toyota’s defense, this was a freak accident that could have been prevented any number of ways. If the driver had been more familiar with the car he would have known how to shift into neutral and/or kill the engine. Had the dealership been more careful about the floor mats they used, the pedal might not ever have gotten stuck in the first place. Toyota really shouldn’t have to do anything here…but the negative publicity from this incident has led Toyota to take action.

However, if Toyota is really wants to fix this problem, why not update the engine computers? Toyota is famous for quality, yet this is a half-ass fix.

What do you think – is Toyota doing too much here or not enough?

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Forbes and Yahoo have compiled a list of the ten dirtiest vehicles on the road, and surprisingly this list is NOT dominated by pickups. Instead, the list identifies a handful of SUVs and uber-expensive luxury cars that are “dirty” – as in “most polluting.”

Their calculation is pretty simple – they take the EPA’s emissions score for each vehicle and add it to the EPA’s greenhouse gas score. Both scores are a number from 0 to 10, 10 being the best. The lowest scoring vehicles rank as “dirty.”

The ten dirtiest / highest polluting cars are (according to the list here):

10. Dodge Durango

9. Dodge Ram

8. Dodge Dakota

7. Chrysler Aspen

6. Mercedes-Benz S600

5. Mercedes-Benz CL600

4. Chevrolet Trailblazer

3. BMW M6

2. BMW M5

1. Jeep Grand Cherokee

There are some problems with this list. First, the Aspen and the Durango are essentially the same vehicle. Same goes for the S600 and the CL600 – mentioning the same platform twice results in a “double count” for these manufacturers. The list also doesn’t include heavy-duty trucks like the Ford SuperDuty or Dodge Ram 2500 (this class of vehicles are likely the dirtiest vehicles on the road).

Still, the data is interesting in that some of the vehicles with the worst fuel economy aren’t found. The Jeep Grand Cherokee with the 420hp 6.1L Hemi – which gets 11 mpg in the city and 14 mpg on the highway – is less of a polluter than the 4.7L (see below).

The article is also particularly hard on Chrysler. According to Forbes, the Grand Cherokee is a perennial member of this list, as are many other Chrysler vehicles.

Diving into the EPA’s scoring system, the pollution score is based on 4 categories of tailpipe pollutants:

• NOx – Nitrous oxides (abbreviated NOx or just NO)
• CO – Carbon monoxide
• NMOG – Non-methane organic compounds (the chemical pre-cursor to actual smog)
• PM – Particulate matter

The data table below shows the difference between the pollutants produced by a 2009 Jeep Grand Cherokee and the 2009 Toyota 4Runner. Both vehicles feature a 4.7L V8, making the comparison pretty close to equal.

Comparing the pollution scores of the 09' 4Runner and the 09' Grand Cherokee

About the data – the numbers in the NO, CO, NMOG, and PM categories are represented as grams per mile.

If you take a look, you’ll notice that the Grand Cherokee pumps out almost twice as much particulate matter, nearly three times the amount of nitrous oxides, and 30% more of the chemicals that directly lead to smog. Despite the fact that these two vehicles have roughly the same fuel economy (the EPA gives them both a 15 mpg “combined” rating) the Jeep somehow manages to be a much bigger polluter.

The next obvious question is “Why?” The Jeep 4.7L does produce more horsepower (305) than the Toyota’s 4.7L (260), and the Jeep’s engine may be tuned more towards HP than pollution. It could also be that the Toyota has a better set of catalytic converters. Without all the data it’s hard to know for sure, but what is certain is that there’s a very big difference in pollution between these two.

If you’re interested in seeing the pollution scores of some other vehicles, check out the EPA’s Green Vehicle search system.

Special thanks to TXTee (a frequent commenter and a member of TundraNetwork) for sending us a link to this story. If you have an idea for an article you’d like to see here on TundraHeadquarters.com, please contact us.

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Saturday Chris Baccus posted a link to an old Studebaker commercial on his Twitter account. This old commercial is corn-ball and ever-so-slightly offensive to women, but it also shows what might just be the very first tailgate step ever…installed on a station wagon.

Studebaker put a tailgate step on a station wagon a long, long time before anyone else.

This is just a still photo of the commercial – you can watch the commercial on YouTube here.

Sort of fascinating, isn’t it? Contrast it with some of Ford’s marketing literature.

First, here’s a photo from the Ford website of the tailgate step in action.

Ford's F150 tailgate step in action.

Ford brags that the “2010 F-150 features an available class-exclusive integrated Tailgate Step,” and they show lots of images of hard-working truck owners making great use of this option on their website, in brochures, etc. They’re proud of the fact they can advertise this feature – and they should be.

For the record, the tailgate step is a good idea. The execution on the F150 isn’t great (it can be hard to load around), but it’s certainly not bad. Ford’s truck marketing manager said that the feature was selling well back in January in this article on Jalopnik, and a lot of people really like it. Kudos to the engineers at Ford.

The point here is that there aren’t a lot of new ideas in the auto industry. 6-speed transmissions, electric powertrains, dual-overhead cams, superchargers, trucks with coil-spring rear suspensions, and just about everything else you’ll hear a truck salesman brag about has been done before. Most of these features were toyed with 50 to 100 years ago.

The military used nitrous oxide injection in aircraft in world war two. The first all-electric car was built all the way back in 1891 by a tinkerer in Iowa. Gottlieb Daimler (one of the namesakes of Daimler Benz) might have been the first to supercharge an automobile back in 1885.

And Studebaker might just have been the first to invent the tailgate step…or maybe not.

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UAW Denies Ford The Same Concessions They Granted to GM and Chrysler

In a move that should be considered shocking (but sadly seems like business-as-usual), UAW members at multiple Ford plants have voted against concessions that they granted to GM and Chrysler earlier this year.

According to news reports, many UAW members believe that “Ford is stronger financially than General Motors Co. and Chrysler Group and thus not entitled to concessions to close Ford’s labor cost gap with its domestic rivals.” Yet unlike GM and Chrysler, Ford didn’t wipe away billions of dollars in debts earlier this year.

By voting down concessions that would have made Ford more competitive with GM and Chrysler, the union shows it can't overcome its suicidal tendencies.

During the last week, many Ford UAW workers voted against a concession package proposed by Ford and UAW leadership. As of today, it looks as if Ford UAW workers will officially vote down concessions that would bring Ford’s labor costs in line with competitors GM and Chrysler.

Here’s why this move by certain UAW members smacks of stupidity:

• UAW President Ron Gettelfinger and UAW VP Bob King helped design the concession package. If UAW workers don’t like the package their leaders have helped to create, there’s a fundamental problem at the UAW.

• Unions workers are supposed to unite. Ford UAW workers shouldn’t expect to be treated any differently than UAW workers at GM or Chrysler…yet that’s exactly what’s happening. In years past, when the UAW workers negotiated raises with General Motors, workers at Ford and Chrysler expected their companies to follow suit. This is called “pattern negotiation,” and it’s been a staple of UAW wage increase negotiations for decades.

• …yet the Canadian Auto Workers union voted to accept the concessions. Evidently, the UAW’s brothers to the North recognized the importance of this agreement. That’s one more strike against the UAW.

• America is in a recession. Unemployment is above 10% in many places in the country. What honest American isn’t grateful to have a job? Clearly, many of Ford’s UAW workers feel entitled to their employment AND a more generous wage and benefits package than their counterparts at GM and Chrysler.

• Most importantly, Ford is at a cost disadvantage compared to GM and Chrysler. Uncorrected, this cost disadvantage could result in a bankruptcy at Ford. Granted, that scenario is highly unlikely…but that’s what UAW workers at GM used to say too.

In defense of the UAW workers at Ford, not ALL of the workers voted against the concessions. It’s possible that some workers simply don’t understand the concessions and are voting against them based on a lack of understanding.

It’s true that some aspects of this concession package are hard to swallow – but tough times call for drastic measures. The auto industry is off by nearly 30% – things are, in a word, bad. The concessions Ford is asking the UAW to accept include a wage freeze for new hires, some important changes to work rules,  and a “no strike” provision through 2016. Ford is offering some concessions as well, including moving some temporary workers to permanent status and commitments to increase production at various North American plants.

The no strike provision, incidentally, requires that UAW members who want to strike would instead be forced to work out their differences through arbitration.

Regardless of the sacrifices, the concessions aren’t the issue here. The issue is that Ford pays their workers more than GM or Chrysler… which means Ford’s costs are higher…which means Ford is at a disadvantage. If the UAW workers at Ford value their jobs – and their company – they should reverse their decision. Unfortunately, this seems all but impossible.

Since Obama's administration negotiated UAW concessions for GM and Chrysler, should they do the same for Ford?

Faced with the facts, I wonder if our government should step in. President Obama found it necessary to bail out GM and Chrysler in order to save the economy, and in the process his administration helped these companies negotiate a new deal with the UAW. Shouldn’t the government do the same thing for Ford? I’m not a big fan of government involvement in business, but it seems unfair for the President to help only two of the three American automakers.

What do you think - Is the UAW out of line? Should Obama intervene and force Ford UAW workers to concede?

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While it’s true that Consumer Reports uses an awkward and fundamentally flawed metric (vehicle owner surveys + historical data) to determine their reliability scores, it’s always nice to see some good press for the Tundra…especially when all the recent talk has been about Tundra frame rust concerns.

Consumer Reports has said that the Tundra and the Sequoia are the most reliable vehicles in their respective classes. Of course, Consumer Reports’ acknowledgment of the Tundra comes with a caveat – they’re only recommending the V6 Tundra as most reliable…the 4×4 V8 Tundra is actually cited as the “least reliable Toyota model.”

Doesn’t it seem a little impossible for one version of the Tundra to be the most reliable pickup in it’s class when another version of the Tundra is Toyota’s least reliable model?

Ya – we think so too. Here’s what Consumer Reports has to say under the heading “Asian Brands Still Dominate”:

“Toyota…had just one vehicle that was below average in reliability, the Lexus GS AWD”

Contrast this info against the Tundra’s status as “least reliable” vehicle and it sounds like Consumer Reports needs to put an asterisk on that designation. The Tundra V8 4wd models have average reliability… just not quite as far above average as the rest of the Toyota lineup.

This seems like an important distinction, doesn’t it?

We’ve been critical of Consumer Reports in the past – specifically for announcing that they weren’t going to automatically recommend the Tundra in 2007. Evidently, Consumer Reports automatically recommends new models sometimes without gathering any data…and they decided not to do that with the Tundra back in 2007. Then they made an announcement saying they “couldn’t recommend the Tundra.”

Seems like they shouldn’t ever automatically recommend a vehicle.

Frankly, Consumer Reports seems to be ran by a bunch of people who don’t understand pickups. For example, their recommended full-size pickup is anything but a “full-size,” yet Consumer Reports has the audacity to say this particular truck “rewrites the book on pickups” and compliments this vehicles’ sedan like ride.

Excuse me? Sedan like ride? Sedan like ride doesn’t usually haul the boat to the lake. By the way, we can’t name this vehicle to you because you have to subscribe to CR to find out what it is, but we’ll give you a hint: you’re not going to be hauling much with this “truck.” Try thousands of pounds less than all of it’s competitors.

In any case, thanks Consumer Reports for illustrating so clearly how screwed up your rankings can be. According to C.R.:

• The Tundra is both the most reliable pickup of 2009 and the least reliable Toyota model
• The top recommended “full-size truck” doesn’t offer a V8
• 2 years ago CR announced they couldn’t automatically recommend the Tundra

Put another way, recognition from Consumer Reports is dubious.

Related Posts:

• Tundra Tops 2008 J.D. Power Long-term Dependability Study
• New Tundra Rated Below Average by Consumer Reports
• Tundra vs. Ridgeline – Pickup Truck Comparison

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Remember when Toyota had a sports car? When I say “Toyota,” by the way, I don’t mean the entire company that encompasses Scion and Lexus. I mean Toyota – the company that used to offer the unbelievable Supra. Somehow in the last 4 years Toyota completely stopped making sports coupes. Now, they’re talking about bringing back the Celica.

Is this the next generation of the Toyota Celica?

However, with a long list of recent sports coupe failures, does Toyota still know how to make a sports car?

Let’s look at the past couple of decades:

The Supra – The Supra was, and is, a legend. The Twin Turbo was an incredible example of all-around performance. Unfortunately, it’s status as a Supercar wasn’t enough to keep Toyota USA from dropping the Supra in 1998.

The Supra Twin Turbo is a legendary performance automobile.

The MR2 – Perhaps the most famous version of the MR2 was the 1991-1999 Turbo, a lightweight car with all-wheel-drive and a turbocharged 200 hp motor that hit 0-60 in about 6.5 seconds. Definitely not bad for the entry-level price point. However, when Toyota re-designeed the MR2 in 2000, they stopped offering the turbo. Five years later it was discontinued.

The 90's MR2 was a small, lightweight car with an available turbo. In a word, "fun."

The Celica – Way back in 1971 Toyota offered the very first Celica in the USA. At the time it was a cheap, sporty car that got great gas mileage. Throughout the Celica’s 30+ years of sales it was never known as a fast car…but it was respectably quick, relatively inexpensive, and reliable. It was also discontinued in 2005.

Mark's cherry 1990 Toyota Celica All-Trac GT is a nice example of Toyota's fastest ever Celica - 200 hp from the factory. Not incredible, but not bad.

The Solara might be called a sports car by some, but it’s no more a sports car than the Camry is. It’s nice – but it’s not performance. The coupe was canceled in 2007 and the convertible was dropped a year later.

Toyota's Solara was nice, but calling it a sports car is a stretch.

If it isn’t obvious by now, Toyota lost their mojo in the late 90’s. After they killed the Supra in 98′ the rest of their sports coupes failed.

Today, there are rumors that Toyota is bringing back the Celica. The car will be a joint venture with Subaru with a rumored price between $20-$25k. It’s said that it will be offered in rear wheel drive with a 200-220 hp Subaru-sourced 4-cylinder.

Side view of the FT-86, possibly the next generation Toyota Celica

Based on the past, the pictures, and your opinion of Toyota, the question before you is: Can Toyota get this right?

Once you’ve completed the survey, click ‘Vote’ to see the results.

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Here are a couple of odd pieces of Toyota news:

1. WiFi Flowers. Toyota is sponsoring an art project that will place giant flowers in public spaces around the USA. The flowers look kind of cool, but what makes them really interesting is that they contain wireless routers for free public wi-fi and a handful of power outlets. Seems like a smart way to publicize the 2010 Prius on the cheap. Good idea.

Wi-Fi flowers will promote the Prius nationwide.

You can check out CNET.com for the whole scope.

While we’re talking about cool giveaways, how about parking Tundras at hardware stores and giving away free tape measures or bubble levels or something? Might be a good way to make some inroads with pickup truck owners who might not otherwise consider the Tundra.

2. Eli Manning buys a new Toyota.

They’ve even got video of it – check it out.

Click here to view the embedded video.

This one might make you chuckle:

Click here to view the embedded video.

Son of a!

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Toyota is acting strange lately.

• During the 90’s, Toyota led the charge in hybrid technology despite the fact they made little or no profit on every hybrid they sold.
• Last week, Toyota announced that they will not significantly invest in all-electric vehicles, nor will they choose to use Lithium-ion battery packs in upcoming vehicles.

15 years ago, Toyota rolled the dice on hybrids with no regards to costs.  Today, Toyota rejects the latest battery technology to save money, and they don’t seem particularly concerned about leading the way on all-electric cars (despite their promise). Puzzled? Keep going.

Toyota's recent moves smack of confusion and poor management.

In March of this year, Toyota reported the largest financial loss in the history of the company and immediately jumped into cost-cutting mode. They canceled executive bonuses, scaled back investments, and decided to close NUMMI, their largest auto plant in California, in order to cut costs.

All of these changes were supposed to usher in a new way of doing things – a “back to basics” approach. Old Toyota CEO Katsuaki Watanabe was fired in June to make way for new Toyota CEO Akio Toyoda, grandson of the founder of Toyota. Akio promised an emphasis on profits, building small cars, and he rejected the goal of becoming the largest car company in the world.

Yet we wondered aloud why Toyota seemed to be throwing away momentum by focusing on small cars. After all, Toyota’s financial problems weren’t because of a decision to “step away” from small cars (as some at Toyota seemed to believe) – the issues were a credit collapse and Toyota’s dependence on production in Japan. Toyota’s profit margins were dependent upon a strong dollar, a myopic business practice to say the least. Toyota leadership often seemed to be contradicting previous moves for the sake of contradiction itself.

Last week, Toyota made yet another puzzling move: At a dealer meeting, Toyota announced plans to spend $1 billion on marketing during the 4th quarter, which is 30-40% higher than normal. While Toyota’s dealers were certainly excited, this move seems wrong-headed for two reasons:

1. Toyota dealer inventories are low. Cash for Clunkers drove demand wild in August, and many Toyota dealers are running low on inventory (many are completely out of Corolla and Yaris, and Camry and Highlander inventory is as low as it’s ever been). It will take 30-60 days for dealer inventories to return to “normal” levels…which means that some Toyota dealers will begin the 4th quarter marketing blitz with low inventory.
2. Cash for clunkers undoubtedly “pulled forward” some demand. While there are signs that the economy is recovering, there’s no denying that the hysteria surrounding Cash For Clunkers pulled some sales forward (people that were planning on buying September or October likely bought in August). The most realistic expectation for the auto industry is that the rest of 2009 is going to be a lot like the first 7.5 months – slow.

If all of the above isn’t enough to convince you Toyota management is lost, consider this:

Toyota is going to “push” lease residuals to boost sales – why didn’t they do this earlier? At the aforementioned dealer meeting, Toyota said they’re going to use marketing funds to increase lease cash and inflate residuals. These moves will allow Toyota dealers to advertise ridiculously low payments (think $199/month 2010 Camry).  The best part? The cost of this program won’t be realized for 2 or 3 years…which is when the auto market is expected to be hot again.

Where was Toyota on this move 6 months ago?

What better way to push sales during a downturn than to provide cheap new cars? Toyota could have enjoyed strong sales for most of the year (rather than just the last month) by advertising cheap payments. Instead of kick-starting sales, the Cash for Clunkers program could have been a strong end to a great summer.

Too bad all the executives were busy cutting costs 6 months ago instead of thinking about how to boost sales.

Of course, it’s possible that this move was planned all along. Perhaps Toyota knew that Cash for Clunkers would be a wild success (in terms of sales volumes). Perhaps they knew that Obama and Congress would triple funding for C.A.R.S. Perhaps they knew that, despite the wild sales volumes in August, the car market would continue to grow into the 4th quarter.

Or perhaps Toyota is being managed in a helter-skelter “let’s-do-this-no-wait-let’s-do-that” sort of manner…which is completely uncharacteristic of them. And puzzling.

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