We don’t want to add to the already overheated panic over Toyota’s (NYSE:TM) accelerator and braking problems, but should we expect an increase in recalls across the industry as cars get more complex and dependent on electronics and software?
On the heels of Toyota’s accelerator pedal recall and Prius braking issues, “In what could be deemed a broader problem with hybrid cars, Ford Motor Co. (NYSE:F) said on Thursday it would roll out a software patch for consumers to address similar problems with braking reported on its Ford Fusion and Mercury Milan models.” Ford’s action came after Consumer Reports said one of its test engineers had experienced what appeared to be a loss of braking power with a Fusion hybrid. Ford said it was aware of one minor accident related to the braking problem but no injuries.
It’s a reasonable assumption that problems with software and electronic systems will increase as cars become more complex, and they also may be more difficult to diagnose.
On the positive side, the fixes might end up being quicker and less expensive if they involve a software rather than hardware fix. Presumably when we plug in our electric cars of the future, we’ll also be able to download software updates or service packs that fix problems and improve performance.
Back to the here and now, as we noted earlier, Toyota’s problems are bad news for the industry as a whole. Analyst comments monitored by Alacra Pulse continue to be overwhelmingly negative. The fact that the exact causes of all the accelerator problems has not been definitively pinpointed is cause for concern, both on safety grounds and to the extent that it affects consumer confidence in Toyota fixing the problem. As the New York Times reports, there are still unexplained incidents, and it is a sure bet we are in for some more sensational, emotional TV and newspaper coverage that cause more damage to Toyota’s reputation.
Tragic though they are, it’s ironic that the number of incidents and accidents is but a fraction of the fatalities and injuries caused by, for example, cellphone use in those same vehicles. Certainly these are important safety issues and Toyota should be held accountable for any shortcomings on its part. If only we could demand the same level of accountability from distracted drivers.
Michael Karesh of TrueDelta argues that contrary to popular perception, when it comes handling recalls, Toyota behaves no differently than GM, Ford, Chrysler, Nissan, or VW and “has not in recent memory been more trustworthy than these companies. But apparently many people felt they were more trustworthy anyway. This illusion is now, in many cases, gone.”
But there is a silver lining: as pointed out by the FT’s Philip Stephens, now is a great time to buy a Toyota as the odds of a problem are still slim and you should be able to get a good deal at your local dealer. Still, it seems likely that the risk-taking bargain hunters will be outnumbered by cautious consumers who will shop elsewhere.