2003: Starting with Foreign Trade

Chapter 711 Recall Gate Incident

"Hehe, this is truly a stroke of luck!"

On February 24, the third day after construction officially began, Tan Jincheng received very favorable news for the Yuechi A1.

The US Congress formally summoned the president of Toyota to a hearing, the reason being nothing more than the previous floor mat scandal. This matter caused a great stir in the US, but it received little attention domestically.

In fact, Toyota's vice president apologized on the 2nd of this month, and then on the 5th, Toyota's president held a press conference to apologize and explain the situation.

Unfortunately, one of the two insisted that the brake failure was a matter of perception, while the other maintained that there was nothing wrong with their braking system.

The refusal to admit wrongdoing naturally makes it difficult to satisfy Apple's consumers, which leads to the crisis becoming increasingly serious.

If it weren't for this hearing, Tan Jincheng wouldn't have remembered that this was the infamous Toyota recall incident. Haha, it's like a pillow being delivered just when you're sleepy.

Some car companies frequently recall problematic vehicles, which isn't exactly new. However, Toyota's large-scale recall this time makes it different.

As far as I can remember, Toyota recalled nearly a million vehicles in the US and also had a recall in their home country. In China, it seems that they recalled about 30 vehicles.

This includes the RAV4, a competitor of the Yuechi A1.

"Is this a serious matter?"

Zhang Yong was a little confused. Generally speaking, when a problematic vehicle is recalled, consumers are given some compensation, and then the media does some public relations, there are usually no major problems. At most, competitors might say a few sarcastic things about you.

Tan Jincheng nodded seriously: "It's very serious. Just you wait and see. I suggest you continue to follow up on this incident and learn from their lessons."

Essentially, this infamous recall incident was due to Toyota's carelessness in handling crisis public relations.

Their initial attitude towards such a serious safety issue as brake failure was to try to cover it up and simply apologize a few times. The US is a major car-producing country; do they think their consumers are fools?

This is not in the Asian market.

"We must pay attention to crisis communication. Which car manufacturer can guarantee that every car is free of quality problems? Now that the US has reached the hearing stage, if a large-scale recall occurs, it will definitely affect China as well. We also need to prepare response policies."

Zhang Yong had no objection to this point. Since it involves multiple car models, if they lose the hearing, there will definitely be a large-scale recall, which would naturally affect the domestic car market.

As is customary, the compensation methods in China and abroad will certainly be different.

To put it bluntly, domestic compensation methods are definitely not as good as those abroad, and we can use that to our advantage.

Zhang Yong didn't dare to think too deeply about it because he lived in this era and simply regarded it as a simple recall event. Even if it might eventually involve many vehicles, a behemoth like Toyota would definitely have a way to deal with it.

But Tan Jincheng knew that the impact of Toyota's recall in China was no less than that of the US, and could even be said to have changed the landscape of Japanese cars in China.

召回门事件在国内波及小30万辆，这可不是一个小数目，BYD在2009年创纪录的卖出40多万辆就敢喊出2010年100万辆的销量预期。

The significance behind 30 vehicles goes far beyond just 30 Toyota owners; failing to satisfy them would be fatal.

To date, Japanese brands remain the most popular in the domestic market. Among joint venture brands, Japanese brands lead German brands by more than 15% in sales. Toyota alone sold 70.9 vehicles in China in 2009.

The Corolla, Camry, RAV4, and other models have consistently appeared on the best-selling lists.

Just as Zhang Yong had predicted, the recall incident did indeed discriminate between domestic and international consumers. As for the consequences, we'll just have to wait and see; even if we told them now, Zhang Yong and his colleagues probably wouldn't believe it.

"Let's wait and see. The results should be out soon. Keep a close eye on the public relations department."

This matter has actually been going on for quite some time in the US. Due to poor communication, public relations issues, and the fact that we are currently in the Spring Festival period, administrative efficiency is somewhat slower.

But now that the year is over, once the US has a result, our response won't be too slow.

Moreover, other joint venture brands are also eyeing the market.

In fact, Wei Lai didn't need to do much to push things along. When the strong are pushed down, everyone pushes them. There are plenty of big guys who will kick Toyota, like the German brands.

"Okay, I'll have them keep a close eye on it. Also, boss, have you decided where to locate your research institute?"

Zhang Yong also agreed with the idea of ​​establishing a research institute to concentrate research and development in one place. In addition to avoiding the phenomenon of multiple factions emerging as the company grows larger, it can also prevent the waste of research and development resources.

"Not yet, do you have any suggestions?"

During the few days Zhao Jinsheng returned to his hometown to attend Zhang Xupeng's wedding, people from Luzhou also made contact. After returning to Beicang, Zhao Jinsheng had several more meetings with Tan Jincheng. Both sides seemed very sincere and each had their own advantages. It was indeed a difficult decision. This was different from opening a factory. If a factory couldn't be established in a certain city, one could simply find a way to move the equipment or sell it to cut losses.

Research institutes are fundamental to the survival of enterprises.

"From a cooperation perspective, Luzhou is the best location. The labor and living costs are lower than in Ningbo. In addition, it is the provincial capital, connected to the Yangtze River Delta, and has greater potential for future development. Not to mention the university resources."

"But in terms of corporate management, it would definitely be best to place it in Ningbo."

After a pause, Zhang Yong continued, "So my suggestion is that it is most suitable to place it in Ningbo. If our business develops further in the future, we can also establish a second or third research institute."

"Another thing is the university resources that Mr. Tan values ​​most. This can also be coordinated. We can arrange more campus recruitment every year. As for other preferential policies, I believe that if the boss talks to the district, it will be no problem."

The core of a company must be personally controlled by the actual controller, and Zhang Yong, as a professional manager, certainly understands this principle.

You can't challenge anything that challenges the boss's control over the company.

Even if a company is doing very well, if the boss no longer has any control over it, then is the boss still necessary to exist?
Having worked with Tan Jincheng for so long, Zhang Yong felt he had a good understanding of his boss and was quite satisfied with him.

Although he was given a lot of work and couldn't even rest during the Chinese New Year, the boss never had a strong desire for power and was willing to delegate authority.

Isn't this the kind of boss that professional managers most want to work with?
But it's one thing for the boss to dare to do it, and it's another thing for you to try to steal it. What the boss gives you is yours, and challenging the boss's authority will definitely not end well.

While analyzing the pros and cons from his own perspective, Zhang Yong did not use any ambiguous language but directly gave his opinions, and also thought of all the ways to make up for the shortcomings that he could think of.

This is the attitude a professional manager should have.

If we really want to consider his own interests, he could have easily recommended Luzhou University, as it is his alma mater and also closer to his hometown.

Not to mention that what he said makes sense. Whether it's the average wage level or the land price, the cost of living in Luzhou is significantly lower than in Ningbo.

After pondering for a moment, Tan Jincheng nodded: "I'll think about it some more and make a decision as soon as possible."

In fact, Zhang Yong had already convinced him.

Yes, if the research institute is located in Luzhou, there is a risk that it will slip out of his control. So what's the point of building it? To contribute to the automotive industry?
I'm not a great philanthropist.

"Okay, then I'll get to work first."

Seeing this, Zhang Yong didn't say anything more. After Tan Jincheng nodded, he left the office.

Weilai Auto is currently on a good track record, with strong sales and a large following. The boss is young, and the company has ample funds and resources to support its development.

As a professional manager, he has the obligation and responsibility to help the boss solve some of the problems that the company faces after expansion.

The boss has always had a good overall perspective. Since he said that the Toyota issue would be very serious and would soon affect the domestic market, let's pay attention to this matter first and see what benefits Weilai Auto can gain from it.

The RAV4 can't compete with the Yuechi anymore, but I don't mind giving it another kick. Who would complain about selling more of their own cars? Also, we can put some effort into the pickup truck segment.

Zhang Yong didn't have to wait long.

When a father beats his son, isn't it all based on his mood? Besides, this time the son was indeed in the wrong first, so it was even easier to beat him.

The hearing results came out quickly: due to a design defect in the accelerator pedal, approximately 2.3 million vehicles across eight Toyota models needed to be recalled, including the 2009-2010 RAV4, Corolla, and Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, and the 2010 Highlander.

The recall affected vehicles dating back to 2005, totaling 230 million units. Such a sensational recall quickly spread back to China.

国内的反应也不慢，最先反应过来的是津门一汽丰田，决定自2010年2月28日起，召回2009年3月19日至2010年1月25日生产的RAV4汽车共计75552辆。

The reason for the recall is the same as the reason given by President Trump at the hearing.

Goodness, this is the grand opening act of the year! And this is only the production of Tianjin Toyota in less than a year, not including GAC Toyota, while the recall period on the US side dates back to 2005.

"Haha, they've sold over 70,000 units of this hot-selling model right off the bat. This is going to be interesting."

Unfortunately, it's already the end of February, so it won't have a significant impact on RAV's sales this month.

(End of this chapter)