Toyota did irreparable harm to their brand because they violated the pact they made with their consumer based on their core competency – durability.
If Hyundai’s and Kia’s are cheaper, we don’t mind. If your Toyota is passed by a BMW or a Mazda, that’s okay too. And if a Nissan is racier looking or a Mercedes is more prestigious, we accept that because Toyotas are supposed to be durable. That’s what we buy — Toyota’s are appliances that should start and stop every time.
Ironically, if Toyota had come out early, identified the problem and told their consumers that because of how seriously they take their oath of durability they would fix the cars for free, they could have improved their brand image and galvanized their brand loyalty.
Unfortunately, they didn’t do that.
And now they’re suffering the same fate that happens over and over to celebrities and politicians that behave badly. If you look carefully, you’ll see that Toyota is not being punished for what they did wrong (their mechanical problems), they’re being punished for how they handled the situation.