Even before recent massive recalls, Japanese consumers had been losing faith in the domestic auto industry.
Sales of new and used cars have been dropping for years, to levels seen in the 1980s, according to the Japan Automobile Dealers' Association. Many car owners say overregulation, unpopular policies and taxes, and lack of consumer protection are taking the fun out of driving.
The hassle of owning or buying a car in Japan begins at the dealership. There are too many of them, and they tend to sell similar-looking vehicles for identical prices, without much room for negotiation. It's not easy to trade in an old car, or to sell one.
When Tokyo resident Kumiko Fukushi tried to sell her Toyota Vista with 60,000 kilometres on it, she said auto dealers offered her "minus ¥30,000," meaning she would have to pay them about $350 to take her smooth-running car, which might fetch $3,000 or more in Canada.
"Why should I pay them for my car? It's not fair," she said. Unable to afford a new car, or hefty annual inspection fees or recycling fees to junk her present car, she opted to store it outside Tokyo, hoping the new government will eventually overhaul the entire auto industry.
Industry observers in Japan blame the sales decline on a variety of hassles. For example, owners must pay upward of $1,000 every year or two for what they see as needless inspections to check whether their vehicle has been illegally modified.
To offset lower sales volumes, auto makers have tried to squeeze every yen out of the manufacturing and sales process. It's a vicious cycle: Consumers buy less, so producers cut to save costs, sometimes resulting in errors and further consumer alienation, which spreads across the greater Japanese economy.
"I am most concerned about a possible loss of trust in Japanese products. [Toyota]should be well aware of its responsible position vis-à-vis Japanese industry as a whole," Tomohiro Koseki, who writes books about Japanese factories, told the Asahi newspaper recently. "A loss of confidence in Toyota would have an ill effect on its many subcontractors and affiliates."
Last May, Toyota reported a record annual net loss of $4.4-billion (U.S.), its first loss in 70 years.
"Toyota is well known in Japan for the inefficiency of its sales system. They have far too many outlets," said William Bonds, a British expatriate who has been reporting on the Japanese auto industry for more than 20 years for Japanese media. "To be competitive, they must cut corners elsewhere and it's not likely to be in corporate administration. The most likely area will be suppliers."
Toyota's problem, Mr. Bonds said, is that it remains a "classic Japanese corporation" reluctant to form foreign partnerships such as those of Nissan and Renault, Mazda and Ford, and Mitsubishi and DaimlerChrysler.
After Toyota's massive recalls this month, the Nikkei business daily commented in an editorial that "words are not enough. The company's crisis management ability is being subjected to severe scrutiny."
Even Prime Minister Yukio Hatoyama has been scolding the company. "When an event that impairs safety occurs, the initiative should be taken to work for the safety of people in Japan and worldwide," he said last week.
But critics note that government pressure on Toyota came from abroad, not from inside Japan, where policies often work in favour of producers rather than consumers.
Toyota's critics often point to its tendency to lean heavily on suppliers to carry out company goals of "lean manufacturing" and just-in-time production. Suppliers must produce the highest quality for the lowest cost with a narrow profit margin or even losses. Some call this the "Toyota way" of outsourcing.
"Toyota has long had a revered place in corporate Japan and Japan has long been revered for its corporate management practices," Mr. Bonds said. "But the truth is that the Japanese fail miserably in actual management. They are fantastic at producing systems - and the Japanese defined the process in auto manufacturing - but when the system breaks down, they are clueless."
Lacking consumer protection, many customers complain about dealers overcharging for repairs. One Tokyo dealer told Ms. Fukushi it would cost about $2,000 to overhaul a faulty air conditioning system. When she drove down the street to an Autobacs parts shop, they fixed it with a $50 shot of freon.
A MASSIVE RECALL
Number of deaths linked to Toyota vehicles by consumer filing complaints with the U.S. government over unexpected acceleration, a jump of 13 since Jan. 27
Toyota vehicles recalled on five continents to repair defects linked to unintended acceleration.
Minimum number of U.S. congressional committees planning hearings into how Toyota and NHTSA have handled complaints.
Number of complaints about Prius braking on Feb. 3, when NHTSA opened its investigation.
Number on Feb. 11.
Sources: U.S. Transportation