Back in March I wrote about how Toyota did irreparable harm to their brand because they violated the pact they made with their consumer by not delivering on their core competency – durability. If Hyundai and Kia cars are cheaper, we don’t mind. If a Toyota is passed by a BMW or a Mazda, that’s okay. And if a Nissan is racier looking or a Mercedes is more prestigious, we accept that too because Toyotas are supposed to be durable. That’s what we buy. Toyotas 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.
But they didn’t do that.
Instead, they suffered the same fate that happens to celebrities and politicians who 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 (the cover-up and the callousness).
But here’s the good news. Another car company paid attention to Toyota’s actions. And when Ferrari recently announced that their gorgeous new supercar, the 458 Italia, could spontaneously catch fire, they handled the news very differently.
According to The New York Times, “the (Ferrari) apparently has a tendency to burst into flames and is now subject to recall by its Italian manufacturer.”
“‘A Ferrari spokesman said the source of the problem was a wheel-arch heat shield that came too close to an exhaust pipe. The adhesive that secures the shield can smoke or catch fire because of excessive heat.’ Now we all know that Ferraris are supposed to be hot but this is ridiculous. Especially when you consider that the car starts at $230,275 (if you can even get one) and is so good that it was referred to by The New York Times auto reviewer as ‘the best sports car I’ve ever driven, the current state-of-the-art.’”
But here’s where Ferrari and Toyota differ. Of course Ferraris are faster, sexier and prohibitively more expensive than Toyotas. But the Italian company clearly knows how to handle both curvy roads and their customers. Instead of trying to ignore or cover up the news, the company simply explained what happened, apologized and said that they would replace every car that’s been destroyed and repair every car with the faulty parts that hasn’t yet been reduced to cinders.
An expensive solution? Of course. But not nearly as expensive as losing the billions of dollars of brand value that Toyota watched go down in flames.