Toyota Number One in the World… in Recalls?

Not two days after imploring everyone to do kaizen like Toyota, we’re reminded that no matter how good you are at lean manufacturing, kaizen, and continuous improvement, if you focus too much on eliminating muda (waste) while ignoring muri (unreasonableness, overburden) you can fail as a business.
A snippet of a Japanese TV program uploaded to YouTube asks “Is Toyota also number one in the world in recalls?” (世界のトヨタ リコールも世界一?)
This image is fairly self-explanatory. The X axis is years, Y axis is recalls in units of 10,000. Toyota has 1,880,000 recalls in 2005. The chart compares Toyota with the recalls from the other two major Japanese automobile manufacturers.
This image explains that the recalls are due to the rapid expansion overseas and the pressure to reduce cost resulting in a supply chain that is overburdened and lacking in personnel. Toyota has been adding production capacity of 500,000 vehicles each year. This is the equivalent of one Fuji Heavy Industries per year (Subaru).

The growth of Toyota has been supported by the vast pyramid of suppliers beneath them, and the development of “building in quality” has not sufficiently extended to the supply base. Quality has decreased as a result.
The response from the Toyota PR department explains the background of the increase in recalls as a “increased structural complexity in our products due to the lengthening span of ownership of the automobile, an increased awareness of quality by the consumer, and advances in new technology and environmental technologies.” Toyota is blaming technology innovation and THEIR CUSTOMERS. If this is Toyota’s true and honest grasp of the current situation, rather than just PR spin and dodge, their problems aren’t going away any time soon.

The PR department goes on to explain that President Watanabe is heading up a “build in quality” effort involving the suppliers, so they area clearly tackling the problem from the highest levels.
What does the future hold? The automotive industry will shift focus in the future from the U.S. and EU to BRIC countries (Brazil, Russia, India, China). The slide says “if Toyota can clear the quality hurdle, they will continue to grow globally.”
Toyota may be its own worst enemy. At Toyota they say “beat Toyota” meaning they should not be complacent even when no other automotive company can beat them. It would be ironic if Toyota beat Toyota, and lost…

6 Comments

  1. Nate

    May 23, 2007 - 8:38 am

    Does anyone know what percentage of sales recalls for each manufacturer would be? I would be more interested in seeing that comparison rather than a chart of totals

  2. Jon

    May 28, 2007 - 1:44 am

    That’s a good point Nate.
    I don’t have exact numbers at my finger tips about 9,000,000 vehicles per year for Toyota, about 3,400,000 for Nissan and about 3,300,000 vehicles sold for Honda would be close I think.
    Based on those figures, and reading Honda and Nissan at 250,000 on the chart above:
    Toyota: 20%
    Nissan: 7.3%
    Honda: 7.5%
    Some vehicles had multiple recalls, so in terms of “cars with recalls” versus “recalls per cars sold” the percentages would look different.
    The alarming thing was that Toyota’s recalls were so low in 2001, considering they had the highest volume, and their recalls have shot up in 4 years out of proportion to their sales growth.

  3. Leo

    May 28, 2007 - 9:11 pm

    I like this article.
    they area clearly tackling the problem from the highest levels.
    they are clearly tackling the problem……

  4. Igal

    May 30, 2007 - 9:21 am

    Interesting article,
    As the data is from 2005 .. I wonder if the 2006 data is available.
    Thx, Igal.

  5. tanggusloy

    July 2, 2007 - 9:38 pm

    excellent post!

  6. BRIAN WALTERS

    December 1, 2007 - 8:41 am

    I work for Toyota, and a lot of Toyota’s recalls shouldnt even really be recalls at all. Most of the time when other makes have recalls they are forced to by the national highway traffic safety admin. but Toyota recalls are mostly voluntary. For instance, on the older pick-ups 89-95 for a steering relay rod. so they are replacing parts in which are sometimes over 10 years old because there were a few cases in which the relay rod broke. There was no real sign of them breaking due to construction of these parts, but it does show you that Toyota cares about there customers