One of the things I always ask myself when our service organization wants to say that the customer is wrong, is …what made the customer think this way? Did our sales force sell it wrong? Is there something wrong on our website or our packaging? Read about a car manufacturer that misled customers but could weasel out of it legally through a disclaimer on the web. A few tips are given on how to handle situations where you have to say ‘no’ to a customer.

A recent beef in the Toronto Star called When a new car does not come as advertised about Toyota not meeting its advertised specifications for its Lexus CT200 demonstrates that Toyota still has not understood its customer expectations. When the car specifications in the websites, down-loadable brochures and owners manual do not match the customer specifications, customers will react negatively. With a large order backlog for CT200s, I expect Lexus will see some cancellations of orders as a result of this publicity.

Toyota has issued a new recall on July 29, 2010 for its Avalon and Lexus LX 470 brands. The Avalon recall is for the 400,000 Avalons from the 2000 – 2004 models in the US, Canada, China and Saudi Arabia. The recall is designed to repair a problems with flawed steering locks. The Lexus LX 470 recall is for 80,000 LX 470s (also known as Land Cruiser 100s outside the US) from the 2003 – 2007 model years. This recall is related to steering shaft disengagement. This recall tarnishes Toyota’s reputation in a new way.

Another blow to the sagging reputation management efforts of Toyota is the latest recall of the Lexus LS Sedans for steering problems. The models affected are the 2010 LS 460, LS 460 L, LS 600h, and the LS 600h and represent about 11,000 cars worldwide. The Lexus ls 600 costs over $100,000 US! The problem seems to be both hardware and software. This latest recall is a further setback to Toyota’s attempts to improve its reputation and customer satisfaction.

Toyota has issued a recall for its Sienna Minivans from 1998 to 2010. The Sienna’s spare tire is held in place by a cable that could rust and snap. This announcement comes on the heels of another recall of 34,000 SUVs and the payment of a $16.4 Million fine to the US Government. Toyota is a classic case of why customer service organizations cannot be held accountable for customer satisfaction.

On Tuesday April 13, 2010, Toyota suspended the sales of the GX 460 Lexus after a report from Consumer’s reports called the SUV a safety risk. Another report shows that Toyota routinely engaged in questionable, evasive and deceptive legal tactics when it was sued. One has to wonder what else is being hidden. Toyota is spending millions on advertising and discounts trying to revive its reputation. But these latest new releases are a severe blow to that effort.

The bad news continues for Toyota’s brands. Prius, Lexus, Sai, Camry and Tacoma recalls have been issued in the past week. And there is investigation going on about possible problems with the steering on newer Toyota Corollas. Customer Satisfaction with Toyota has certainly been impacted with this widespread quality problems. Some Toyota units in the US were named in a Racketeering lawsuit. Toyota shareholders have also seen a big drop (about 20%) in their share value since mid January when the most recent recalls started.

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