Toyota and losing confidence

5 February 2010

How the mighty fall! Toyota is now facing a huge problem, after having to recall millions of vehicles for faults. A year or so ago, Toyota seemed to be on its way to world domination, at least in car manufacturing.

At the risk of over-exaggerating, this trouble is causing a noticeable consternation in Japan, and is adding to the sense of unease and loss of confidence among the Japanese. Toyota’s problems are seen as emblematic of the troubles brewing in Japan. Or to put it another way, Toyota is a symptom of a deep malaise afflicting Japan, where Japan has lost out on the following areas: technological know-how, high levels of customer care, grounds in scientific and engineering capital. Japanese pride on being on the cutting edge of technology was hurt.

As with other socities, there is a coterie of doom-mongers, who loudly proclaim the end of Japan as we know it, and the issues involving Toyota is the clearest manifestation of the impending collapse of Japan as a state and society. This piece of news is linked to the decline of soical mores and educational standards. According to this line of argument, social mores, such honesty and making perfect goods, would have prevented previous generations of Japanese from creating a situation where a massive recall is required. Furthermore, it underlines the inability of the Japanese education system to create enough bright engineers and scientists to spot and weed out such problems pre-emptively.

It is a big problem for Toyota, and it will need to act decisively and swiftly to regain and retain customers’ trust, but some of the alarmist arguments do seem really rather over-blown.