Economics

The article I chose, titled Toyotas Big Recall Unlikely to Quiet Critics, is an article relating to consumer welfare. Because of problems in sudden-acceleration, Toyota has announced to recall a number of 3.8 million vehicles. It is one of their strategies to silence controversies and critics. A number of complaints of sudden-acceleration have been dismissed by the company saying such happened due to the drivers fault. The welfare of the consumers is greatly concerned in this issue since Toyota is topping the list and beating other car producers when it comes to sales. Reports of sudden-acceleration which resulted to a deadly accident in California are one of the factors that pushed many car safety critics to do something for the protection of the consumers.

As a company producing an output that is needing safety by humans, Toyota should have further developed a more extreme quality measure in identifying failures and mishaps of their products rather than just innovating their products features. This article is relevant to consumer welfare because lives are endangered despite a good amount is paid to the company for their safety in using their cars. This article allowed me to further digest the importance of the consumers safety when a product is released in the market. Consumers are the reason why a demand is created and profit is generated to a firm. Therefore, the consumers deserve a just return of their moneys worth from purchasing a product or a service. The appraisal of economic outcomes, institutions and processes is used by the author of the article as philosophy. The author, Joseph R. Szczesny, presented the consequences that Toyota may undertake. If quality and safety issues will continue, Toyota will lose the trust of the consumers, thus making a huge decline in their profit for their products. If they dont settle the issue by not recalling the vehicles, the consumers will start to be dissatisfied by the kind of service and dedication they provide to their buyers. Since they settled the issue by recalling the vehicles, it will create a big expenditure for the company.

Therefore, to maintain the car companys reputation, they have to pay a big price. Toyota will lose its value if errors and quality mishaps such as this will continue to pursue. Total Quality Control should immediately be imposed in the production process. In addition, their must be zero percent failure of the product when they release it for selling. The issue of Toyota is micro economic. It is because the issue is within the firm. Though it involves a lot of outside factors from the firm, the root of the problem came from within. The author concluded by saying that the car company was planning to a 1 billion budget on incremental production, advertising and incentives. Toyota, who has seen 28 of their sales in the fall of 2009, said that one cannot save their way through recession, you have to sell. The author left a question asking if the consumers still want to buy.

    As to whether the consumer would still want to buy, it is indeed a big question that the author wants the people to ponder. The issue caused a big damage to the company. There may still be loyal Toyota consumer buyers who were satisfied with the product offered that will still continue to buy from them. But for many of the life-conscious citizens, they might think twice in buying a car from Toyota. Toyota, for me, has handled the issue well since they took the responsibility of recalling and replacing the defects of their products. In the future, this will again generate trust to the consumers because the company didnt abandon their responsibility to their buyers. For now, there might be decreased revenue but in the future, Toyota will surely revive the lost trust from their valued customers. Toyota is a company who believes in continuous improvement. Surely, the company is now thinking and doing ample measures to further better their product and services.