The problem is the driver: Toyota strikes back (Feature)

By Daniel Schnettler Mar 20, 2010, 2:56 GMT

New York - For two long months, Toyota endured a royal beating as the whipping boy for the car-crazy United States.

Its president Akio Toyoda, grandson of the founder of the storied Japanese car producer, endured a humiliating dressing-down by the US Congress.

Toyota's runaway-car-syndrome has been subjected to an excruciating probe by US safety officials. And after sailing at the top as the world's largest car producer for awhile, Toyota's sales crashed in the wake of the global recall of more than 8 million cars for crucial safety repairs.

But now, the US branch of Toyota is fighting back. Its mechanics are going after con artists and charlatans who are trying to profit from its steady steam of troubles. And they're proving that not every consumer complaint is justified and not every accident can be blamed on Toyota's shortcomings.

Within the space of several days this week, at least two headlined cases of alleged runaway, out-of-control Toyotas were shown to be questionable. In the case of a woman in a New York suburb whose Prius crashed into a wall, it now looks like the driver may have been at fault. In the case of a man who charged his Toyota hybrid sailed unstoppably for 50 kilometres on a highway near San Diego, California, there are also huge questions - and even allegations of malicious intent by the driver.

'Every auto recall has its free-riders,' said auto expert Christoph Stuermer of the international economic research institute, IHS Global Insight. It's normal that the number of complaints rapidly escalates, he said.

'Most drivers don't know that there's a hotline,' Stuermer noted. And when they do find out, they unload all their worries and crises, he added.

Earlier this month, for example, after reports surfaced that some gas pedals continued to stick even after repairs, the number of complaints climbed from 10 to 60 within one day. While US safety officials were investigating, there has been to date no evidence of failed repairs.

'The problem is often the person sitting behind the steering wheel,' Stuermer said. He guessed that three of four Toyota defects could be blamed on the owner's poor maintenance record, on worn-out parts or on erratic driving habits.

'When a European sees a pothole, he brakes and drives around it. When an American sees a pothole, he holds steady to his course and drives right across it,' Stuermer said.

Toyota in fact ranked quite high in the annual JD Power & Associates' annual study of vehicle dependability. Thirteen of its models, including Lexus, ranked among the top three cars in 19 categories in the 2010 study.

Jim Lentz, chief operating officer of Toyota Sales in the US, boasted about the ranking: 'This is great news and timely for both our customers and our dealers, as it provides reassurance our vehicles continue to be an industry benchmark for quality.'

But a good reputation in the past does not necessarily win back the lost trust of customers. That was shown by the crushing drop in sales of the past two months. The sale of only 100,000 cars in each of the two months in the US put Toyota back down where it was 10 years ago.

Toyota is determined to change that. The car maker has launched the largest rebate and discount offerings in its history, starting with 0-per-cent financing, low leading rates and two years of free maintenance. Experts at the car market organization Edmunds.com estimate that sales will rocket by 30 per cent.

'Americans love a bargain,' Jeremy Anwyl of Edmunds said - especially in current times of financial distress.

If Toyota manages to win back customers through good service and lure new drivers with discounts 'then Toyota may be able to put out the fire,' said Global Insight's Stuermer.

But Toyota still faces a wall of challenges: court cases from more than 30 deaths and dozens more injuries from runaway-Toyota accidents, claims from Toyota owners about the depreciated worth of their normally value-holding vehicles, claims from dealers for sales losses, and the anger of shareholders.

It could get really hot for Toyota if all of the affected join up for a class action suit. There is talk of claims that could reach into the tens of billions. And the financial losses would only be mild compared to the larger problem: 'The real damage would come from the court case itself,' Stuermer said.

A big court case could spark another wave of tragic accident stories in the media. That's a battle that could present a true challenge for Toyota.