Toyota has issued recalls of around 4 million vehicles that could have faulty accelerators [GETTY]
The Toyota brand has been associated with good quality and efficiency for decades. But the latest recall of millions of vehicles over safety concerns has caused a massive dent to its sales and reputation.
It could cost Toyota around $2bn and may significantly undermine consumer confidence – in what was once the symbol of Japanese reliability and innovation.
Many reputable companies around the world have underwent similar situations. Some have succeeded in restoring public trust and some are still trying to win it back..
In the 1980’s, Audi AG, the German automobile manufacturer, did a massive recall of its Audi 5000 models, after a defect in the car’s accelerator pedal was linked to six deaths and 700 accidents in the US.
As a result, US sales of Audi cars plunged by 83 per cent from 1985 to 1991.
A US class-action lawsuit with about 7,500 plaintiffs seeking compensation from the German car company is still being fought.
In 1978, Firestone, the US-based tyre company, recalled over seven millions of its model 500 tyres, which is the largest tyre recall to date.
It happened after congressional hearings found the tyre to be defective and the cause of 34 deaths.
Numerous lawsuits were settled out of court and millions of dollars were paid out in compensation to plaintiffs.
The blow to its reputation had severely crippled the company’s sales and share price.
In 2009, Ford, the US car giant, issued a recall of 4.5 million vehicles, including its Windstar, Mercury and Lincoln models, over a faulty switch, which had serious potential to lead to dangerous fire hazards. Texas Instruments had manufactured the faulty switches.
It is Ford’s largest recall in history, which has brought the total number of the company’s car recalls to 16 million.
Johnson & Johnson
In 1982, Johnson & Johnson, the maker of Tylenol, the leading US pain-killer medicine at the time, faced a huge crisis when seven people in the state of Chicago were reported dead after taking poisoned Tylenol capsules.
The pills were laced with deadly amounts of cyanide, a highly toxic chemical.
The company conducted an immediate product recall from the entire country which amounted to about 31 million bottles and a loss of more than $100m dollars.
Immediately after the poisonings, Tylenol’s share of its market dropped from 37 per cent to seven per cent.
The case remains unresolved and no suspects have been charged.
Perrier, the France-based company, suffered a blow to its reputation in 1990 when numerous bottles of purified spring water that it sold tested positive for traces of benzene, a flammable chemical used as an additive in gasoline.
Perrier said that it was an isolated incident of a worker having made a mistake in the filtering procedure.
The incident ultimately led to the recall of 160 million bottles of Perrier.