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Toyota travails: Lesson for Chinese carmakers

By Han Tianyang (China Daily)
Updated: 2010-03-08 10:35

Worldwide prestige

As the top-selling brand in the world renowned for its production efficiency, Toyota has received worldwide accolades for its manufacturing systems and attracted many followers, including some Chinese manufacturers, who are eager to expand capacity and reduce costs.

"One shouldn't say Toyota is good for nothing merely because of the recent recalls - the company still has much worth learning," said Li Shufu, president of domestic carmaker Geely.

Li said his company is studying Toyota's problems and how it works to solve them in an effort to learn from its mistakes.

Toyota's recent travails have also put China's recall regulations in the spotlight.

Last year, China recalled a total of 1.36 million vehicles, according to statistics of the national quality watchdog - the General Administration of Quality Supervision, Inspection and Quarantine - of which nearly 1 million were Toyotas.

The figures don't necessarily mean that Toyota cars have poor quality, analysts said, noting most domestic carmakers don't take the initiative to make recalls since supervision is weak.

According to current regulations, vehicle producers in China that try to cover up defective products will be fined a maximum of 30,000 yuan, a trivial punishment compared with what their foreign counterparts have to face if they attempt to hide serious defects.

Jia Xinguang, an independent automotive analyst, wrote in an online comment that Chinese regulators should increase penalties and invest more energy in building an effective information system to manage complaints. He also calls for more integrity in manufacturers.

Jia said that the current regulations tends to protect carmakers rather than consumers.

Guotai Jun'an Securities analyst Zhang Xin agreed that regulators' reluctance to implement stricter rules is due to considerations about protecting domestic automakers, which are generally not as good as foreign brands.