Toyota Motor Corp. is having a rough go of it these days, but there were two positives taken from the company president’s third briefing on Wednesday.
Concerns have been raised that Toyota may have intentionally or unintentionally delayed taking action in response to the acceleration problem while knowing about it early on. Akio Toyoda responded to this suggestion by noting that management is not all-knowing and will honestly report what it did and did not know at the public hearing. He also said the company will outline what it can and cannot do technologically.
Given that the company has been asked to provide all internal documents relating to recalls since 2000, UBS analyst Tatsuo Yoshida thinks Toyota’s response suggests it did not intentionally delay taking corrective action.
Toyota has also learned the importance of eliminating customer concerns and disclosing information even when initial actions meet standards or laws, the analyst said in a report.
“In addition to improving the frequency and speed of collecting and analysing information on problems globally, it is also taking the initiative in showing progress of response measures on its website,” Mr. Yoshida said.
He expects these steps to raise the level of problem response demanded in the industry, which could mean that companies with inadequate resources will falter.
The UBS analyst expects Toyota’s share price to remain weak for the next two to three months on concerns about recall-related information and the sales impact. However, he noted that declines could be an opportunity for further long-term investment. The stock remains his top pick, with forecasted upside of nearly 50%.
Photo: Toyota Motor president Akio Toyoda (R) answers questions as vice president Shinichi Sasaki (L) looks on during a news conference in Tokyo on February 17, 2010 to provide an update on the progress of massive recalls. Toyota said it would fit all new models with a system that cuts engine power when the accelerator and brake pedals are applied at the same time, to prevent runaway car accidents. (KAZUHIRO NOGI/AFP/Getty Images)