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Audi: Toyota can learn from Audi

Total recall: Audi knows all about the pain of recalls, and says Toyota can learn from its experiences.

Recall woes that beset Audi in the 1980s are a lesson in damage control for Toyota

Toyota logo15 Feb 2010

“LEARN as much as possible and show you understand immediately.”

These are the words of an Audi AG executive to the Toyota Motor Corporation in the wake of this month’s media frenzy surrounding a series of safety related global recalls and their consequences.

The advice is from a person not wanting to be identified, who closely observed the aftermath of Audi’s disastrous 1988 recall in the United States, which led to sales freefalling from a high of almost 75,000 units a year in 1985 to little more than 12,000 six years later.

Claims were made against Audi alleging the deaths of six people and hundreds of accidents after a so-called “unintended acceleration” problem with the C2 and C3 series 100 and 200 models sold in North America as the Audi 5000 from 1981 to 1987.

However, despite that fact that a US 60 Minutes television program screened in November 1986 depicting an Audi surging forwards while the brake pedal was being applied simultaneously was later found to have been set up by a so-called ‘expert’ on behalf of one of the plaintiffs who was taking action against Audi at the time to simulate the alleged problem, American consumers stayed away from the brand in droves for more than a decade.

 center image Left: Audi 100 C3 series.

Nevertheless, despite protestations from Audi suggesting – and a ruling from the National Highway Traffic Safety Authority concluding – that it was most likely driver confusion that led to the incidents, Audi did voluntarily alter up to 250,000 models sold in America from 1978, modifying the distance between the brake and accelerator pedal, as well as creating a lock-out to keep the automatic transmission lever from being inadvertently knocked into gear.

Although it took a dozen years for Audi sales to reach their mid-1980s levels in the US, the company is still in the courts against owners claiming damages because of the subsequent drop in resale values of the ‘affected’ models.

“They must learn as much as possible as soon as possible in order to react,” the Audi man told GoAuto at the launch of the fourth-generation A8 luxury sedan in Spain this month.

“You must let the media know that you understands that there is a situation and that it is very serious. And just as importantly, you must then immediately let the customer know that you acknowledge that there is a problem – even if it is not necessarily your fault.

“And whatever you do, don’t deny the problem … it must be very clear to the customer that he or she will be taken care of immediately.”

The Audi executive emphasised that transparency was paramount if a company was to get through a damaging situation such as a safety recall.

Appearing to be doing everything that is humanely possible to rectify the situation was just as important.

“You have to be honest – and you have to appear that you are not just talking about action, but doing it also.

“We were in a different situation in 1988 because even though there was a so-called ‘sudden acceleration’ issue like Toyota’s, there was absolutely no judgement at all against us. But it didn’t influence the US public’s opinion or confidence in Audi. It became a chance for our competitors to pass us for many years afterwards.

“Just like Toyota now, we had the public opinion against us – even though we did not have a technical problem at all … it was proven so. That was the difference between us and Toyota.

“But the damage was already done and it was really very big anyway.

“(In the end it was clear that) we needed to manage it much better.

The Audi insider still believes that the Ingolstadt company still suffers from the fallout of the 1988 US recall because bad publicity can stick into consumers’ minds for many years afterwards.

“We still have a long way to go before we are the number one luxury brand in America, but we are showing that with great cars you can make it through a crisis.”

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