• Feb 11, 2010



With a combined recall of over eight million vehicles worldwide, Toyota is now firmly entrenched in the public relations barrel. Those millions of recalled vehicles will hurt the Japanese automaker both in terms of the costs associated with the recall as well the overall loss of sales, which could total well over a billion dollars. But is Toyota the only automaker with the potential to lose out in this story? Honda Chief Financial Officer Yoichi Hojo apparently doesn't think so.

Honda's CFO told The Wall Street Journal that the Toyota recalls could hurt consumer's industry-wide perception of quality, adding "if customers start to harbor doubts, that would be problem for the whole industry." If Mr. Hoji's fears are realized, the quality perception gap could lead to the slowing of the auto industry recovery, which could hurt U.S., Korean, German and other Japanese automakers. Also unknown is if the recent pressure put on the National Highway Traffic Safety Administration will lead to tougher regulations for all automakers in the future.

And while Toyota is down and out right now, Hoji feels Honda will continue to refrain from tailoring incentives towards current Toyota owners, bucking the precedent set by GM, Ford and Hyundai. That doesn't mean Honda won't increase rebates, though, because inventories of Civic and Accord models are reportedly rising. Hoji said in the interview that Honda will increase second quarter incentives to about $1,400 per vehicle; $600 more than in the previous quarter, adding that he expects Honda's global operations to end fiscal 2009 (ending March 31) with a 265 billion yen profit ($2.96 billion in U.S. funds).



[Source: The Wall Street Journal - Sub. Req.]



I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 42 Comments
      • 4 Years Ago
      no, mr. hoji, it's just going to affect japanese automakers.
      • 4 Years Ago
      Toyota's...send them all to the track.They would make great race cars.Always floored and no breaks!
      • 4 Years Ago
      ** Insert stuck accelerator and air bag recall here **

      All kidding aside, it's a legitimate concern. Perception is very important.
      • 4 Years Ago
      If it is any idication of any one loosing faith in Toyota, we have lost dozens of lease customers in the past couple of weeks. Several of these loyal customers have been buying and leasing toyota for decades and have turned in the lease and gone on to other makes. The anger is real. Our showroom is like a ghost town. Mechanics in our shop sing the same tune. Toyota quallity is no longer what it used to be. I feared for my job last month when I traded my Camry for a Terrain only to find out our service manager, while driving a Toyota demo, owns a Malibu and Mazda as his personal cars.
      • 4 Years Ago
      Hey Hojosan, it's not Toyota's problems that will cause Honda's sales to flop: it's the crappy designs you've been saddled with. And that CR-Z whybrid.

      But at least can we get the guy's name corrected, please? It's Hojo, not Hoji. Hoji is a sort of tea.
        • 4 Years Ago
        "It's Hojo, not Hoji."

        Howard Johnson's?
      • 4 Years Ago
      This dude is no more truthful than the Toyota gang of deceit. He's playing his cards close to keep the Japanese government off his back, but he will continue to increase incentives..... I hope Ford and GM continue to pound Toyota on the quality issue, Toyota "is" vulnerable, their quality is a mirage.
        • 4 Years Ago
        Honda is also afraid the Japanese quality bubble has been burst, and they're in that bubble. By the way, that Japanese quality is a myth.
      • 4 Years Ago
      Looks like Japanese quality is a myth.
        • 4 Years Ago
        Another myth is that the Japanese don't do incentives. They supposedly just slow production down to the point where they don't need them. We see in this post that Hoji San is proving that wrong as well. Interesting how many myths about the Japanese automakers went out there when times were good (for them.)
        • 4 Years Ago
        @Tourian

        "So let me get this straight. This guy thinks the whole world was under the spell of Toyota's Kool-Aid and are now disillusioned with cars in general because Toyota stumbled big?"

        Not sure how you can't comprehend that, except for your pointing out the obvious about Honda's recent recalls. And as a former Honda (and former Toyota, Chrysler and GM) owner, automakers have recalls year-round. That's really not that big of a deal. It IS a big deal when automakers are recalling for hazards . THAT would be the point of the TSBs. Most of Honda's TSBs in recent memory have been for components that wouldn't actually kill you. I can't say the same about my recalls for the Chrysler and GM products of yore.

        That being said, the point I'm understanding from Mr. Hoji's comments rings particularly true about Ford and GM. They have been attempting to show the public that they can build top quality vehicles. It's an uphill battle to change a large portion of the population's mind about an industry that really gave a crap about quality and focused so much on its bottom line. Obviously, Mr. Hoji has a vested interest in keeping Honda's bottom line bigger, but with Toyota's "sterling" reputation for quality, these recent findings about how crappy Toyota is as a company CAN have an impact on other manufacturers who're already in the hole when it comes to perception (GM, Ford, Chrysler, Suzuki, and even with the strides they've been making, Hyundai and Kia), slowing all sales down. And slow sales means...well....2008 ring a bell?

        He never said it was a guarantee. He's saying that it's not impossible.
        • 4 Years Ago
        @geo

        Luis lost any shred of credibility, if he ever had any, after he said people shouldn't buy Hyundais because the profits go back to Korea even though just a few days earlier he'd said Toyotas are great cars and he still recommends them to lots of people. No further need to call him out after that as far as I can see.
        • 4 Years Ago
        If Honda weren't recalling 400,000+ airbags, there wouldn't be a ripple.
        • 4 Years Ago
        Just be happy Luis did'nt figure a way to blame Bush for this. Oh, wait. It's early.
        • 4 Years Ago
        There's no basis for this. Recalls happen all the time. Chances are, with fixed pedals, all those Camrys will be on the road for 200k+.

        • 4 Years Ago
        Recalls happen all the time. Hiding quality and safety problems not so much

        Japanese old saying: If it stinks, cover it.
        • 4 Years Ago
        say it isn't so! Asian cars are the best!

        ... while i dont think one airbag recall is going to push honda into the gutter, hopefully people will open their eyes to the fact that japanese cars just aren't all that. all car companies have their problems.
        • 4 Years Ago
        "It IS a big deal when automakers are recalling for hazards that can start fires, or in the case of Firestone, lead to situations that can cause genuinely serious harm or death. TSBs are much smaller problems. (DBW software issues that result in jerky rides, rattles, etc). THAT is the point of the TSB."

        And I meant Mr. Hojo, not Hoji.

        -R
      • 4 Years Ago
      I think people are missing the point of his concern. Automakers are resorting to negative, gotcha marketing (and the press is amping it up to increase their ratings). While this may gain market share, it reduces people's opinions of companies. Those companies then retaliate and lower their attacker's status.... (if GM or Ford were to have another major recal in this type of environment, it would cripple them)

      It ends up being like modern politics, were there are only a few people who vote for people they actually believe in with the majority voting for what they see as the lesser of evils. However, unlike politics, businesses succeed from $$$ sales rather than by having comparatively larger percentages. People looking for the lesser evil will spend less on a car as a reflection of their personality and will be less likely to spend more than absolutely required to get what they need.

      All those trying to canibalize Toyota sales may get some short term gain, but it is not good for the industry overall. And remember that the pedal assemblies that are part of Toyota major recall are from a US-based supplier, so this is costing US jobs...
      • 4 Years Ago
      The only reason I can see his comment being true, and not a cagey way of saying "Non-American Industries will suffer because of their quality perception being lost" is that the Toyota's gas pedal part is something other companies (not just Japanese ones) could be using. I have yet to read a report that outlines who else exactly, if anyone else, is using that part - or if they're using similar part, could it suffer the same faith? Manufacturers and part maker have been pretty closed on that information.
      jobmontro
      • 4 Years Ago
      Honda dealers are providing incentives towards current Toyota owners in my Area. About $1500.
      • 4 Years Ago
      Toyota ......send them all to Daytona.They will make great race cars.Always floored and no breaks!
      • 4 Years Ago
      Gee Honda, do you think the recent recall for shrapnel from Honda air bags could be a bigger factor than Toyota recalls?
    • Load More Comments