The Japanese dominance in the global auto market is falling apart like a house of cards. First, it was the recall drama that saw both Toyota and Honda get embroiled in a debate about reliability. Now it?s a study by Brand Finance which shows both carmakers? brand value dipping far beyond expected levels. Toyota, the second largest automaker in the world, saw its brand value plummeting from $26,055 million in 2008 to $21,994 million in 2009, according to a global study released by Brand Finance, and shared exclusively with FE in India. While Toyota does not have a domestic recall history, Honda which has been involved in a few recall situations here, saw its global brand value dipping from $13,648 million in 2008 to $11,460 million in 2009. And what?s more, after the current spate of recalls, Toyota?s brand value is slated to further go down 25%, according to Brand Finance India?s managing director Unni Krishnan.
Toyota?s January sales in the US, which is the second largest automotive market in the world after China, has also been hit by as much as 16% while rivals such as General Motors and Ford are making hay. Not surprisingly, GM?s US deliveries climbed 14% in January, while Ford?s sales rose 25%. Incidentally, Honda, which declared its better than expected October-December profits, also raised its profit forecast for 2010.
Recently, Toyota recalled millions of vehicles, globally, but not involving India, across eight models while Honda has recalled certain models of the City and Jazz. Honda has recently recalled around 8,532 units of the second generation Honda City, manufactured in 2007, for a preventive part replacement of the ?power window switch?. Earlier, the company recalled certain models of the CR-V and the Civic.
Unni Krishnan said, ?Toyota was the golden child of the auto world and it reached its zenith for product excellence. But the fall was inevitable when the chairman last year went on record talking about its fall from greatness due to complacency. Toyota shows no sign of adopting the strategy it used in the US when it was forced to recall thousands of Lexus LS 400s in 1989. On that occasion, it picked up the cars from customers, repaired them and returned them with a full tank of petrol.?
Incidentally, the biggest loser in the brand valuation rankings is the premium German marquee Mercedes-Benz whose brand value dropped more than 50% from $20,159 million in 2008 to $ 9,844 million in 2009. The silver lining in the bleak landscape has been provided by Volkswagen and Audi with both improving their brand values over last year.
Volkswagen?s brand value climbed to $10,242 million in 2009 from $8,210 million in 2008. Similarly, Audi?s valuation moved upward from $4,771 million in 2008 to $6,323 million in 2009.
Unni Krishnan added, ?Aggressive marketing helped these companies to gain ground.