Toyota announced this week that it is recalling another 6.5m cars across 27 different models to fix five different problems, including faulty steering wheels and seats. It's another blow for the world's biggest selling car firm, whose reputation in recent years has taken something of a battering over quality issues.
In identifying problems and fixes quickly this time the firm is doing the right thing. Nevertheless, it's another big recall for the firm. Since early 2012, the company has recalled around 20m vehicles and sold 18.7m. The latest recall isn't even the biggest announced in a single day: back in in October 2012 it recalled 7.4m cars, mainly Yaris and Corolla models over faulty window switches.
Toyota stated that in the latest cases there had been no reported accidents or injuries relating to the problems. Models affected include the Corolla, RAV4, Hilux, Yaris, Tacoma, Urban Cruiser and Scion xD.
Toyota took a beating back in 2009-10 when it was far too slow to recall cars over what was termed 'sudden unintended acceleration' or 'SUA'. It eventually had to recall over 10m cars to fix the problem and admitted that from 2002 to 2009 it had put growth ahead of quality. During that time the firm had got the growth bug.
Only last month Toyota was fined $1.2bn by US regulators relating to an investigation into misleading statements the company had allegedly made about safety problems with its cars relating to this SUA episode. Back in 2010 a third of the value of the firm was wiped off its share price and billions had to be spent fixing cars and then offering discounts to tempt customers back.
The Toyota brand, built up over decades to embody quality, had been badly tarnished.
Having been badly scarred by not being seen to respond fast enough to the pedal problems in 2009-10, Toyota has worked hard to turn things around. The firm has gone back to its core strategy of quality first, leaving growth to look after itself. The firm retrenched some production lines and has said it won't expand nearly as quickly.
It also re-organised so as to give greater control to regional level bosses in responding to customers and being able to act quickly and make recall decisions, rather than having to get approval from a remote head office in Toyota City in Japan. And a new quality committee was set up a senior level in the firm with outsiders on board to re-stress the quality issue.
That, along with continued investment in new innovation such as its hybrid technology (Toyota sells 85% of all hybrids sold in Europe) means the firm is actually very well placed. But that still leaves the issue of how many more recalls there are relating to the period of over-rapidly expansion over 2002-9 and quality dilution.
In the most recent mega-recall, most of the affected cars are in North America, with 825,000 in Europe (40,000 in the UK), and 300,000 in Australia, where the recall affects the Hilux and Yaris models.
In the UK, the recall in particular concerns 25,000 RAV4 and Hilux models bought between June 2004 and December 2010; these cars have a faulty connection from the steering wheel to the airbag, meaning that a certain turn of the wheel could cause the airbag to deactivate. In the US, the same problem affects 1.3m vehicles, including certain models of the Corolla.
Toyota has also found a problem with the sliding mechanism in the front passenger seat of some models of the Yaris and the Urban Cruiser (badged in the US as the Scion xD) which means that they could break with repeated use. This seat problem affects 10,263 UK-registered vehicles built between January 2005 and August 2010.
The scale of the recall rises to 6.76m when some models of the Pontiac Vibe and the Subaru Trezia are also taken into account, as these were 'platform share' models with Toyota. The Pontiac Vibe, a General Motors model, is the same as the Toyota Matrix. Subaru is partly owned by Toyota, and the Trezia model affected is the same as the Toyota Ractis.
Recalls, of course, have been around for as long as the car industry has existed. We're probably more aware of them in the wake of the 2009 recall and also because most recently there have been some big ones. That's not a surprise given the underlying economics of the industry.
Given that it can cost anywhere up to $1bn to get a genuinely new car to market; car makers are increasingly using common components and platforms across models and brands so as to reduce costs. So if something goes wrong with an accelerator pedal or a seat mechanism it doesn't just affect one model but perhaps 6 or 7, and across different brands.
The car industry's quest for the cheaper components was also a factor in the recent spate of recalls. Some companies have gone for an aggressive cost-cutting strategy which went for looking for different components across different parts of the world. That may get costs down but exposes the firm to more risk when things go wrong.
Several companies, especially Japanese carmakers, are now reassessing where they source car parts and make their vehicles, especially in the wake of the Japanese earthquake and tsunami and Thai floods, as a 'second-sourcing' strategy to improve supply chain resilience. That also applies to the quality issue.
And more broadly, we found in our own recent research that 1 in 6 manufacturers are reshoring some manufacturing activity to the UK, in part because of quality issues.
Despite its recent set-backs, Toyota has bounced back well in recent years. Late last year it raised its annual profit forecast for 2013-14, bringing it close to pre-crash records, with the firm's figures boosted by a weaker Yen and healthy sales in a resurgent US market.
Toyota forecasts a net profit for the year just ended of £10.5bn (1.67 trillion Yen), up from a previous forecast of £9.3bn (1.48 trillion Yen). If achieved, this would be just below the firm's highest net profit recorded, back in 2008. The results are in contrast with Nissan which cut its profit outlook in late 2013.
While much of the good news on profit figures is currency-led, it should be noted that Toyota has gone back to what it always did well, making quality cars with a focus on controlling costs, combined with investments in new technology.
So despite this most recent recall, it seems that the firm has got its mojo back.
* Professor David Bailey works at the Aston Business School