Toyota sees sales surge amid safety woes after slashing prices

After the most testing year in the company's 73-year history, Toyota executives can perhaps afford to greet the new financial year with guarded optimism after last month's dramatic sales increases in the US and Japan. The rebound was to be expected after the catastrophic collapse in sales prompted by the global recession, but the firm will be more encouraged by signs that its recent safety recall of more than 8.5m cars has so far failed to deliver the killer blow many had expected. The world's biggest carmaker saw US sales rise 41% in March from a year earlier, having fallen 16% year-on-year in January and 9% in February. Toyota attributed its March performance to a series of incentives that gave buyers discounts of up to $2,250 (£1,480) a vehicle last month. The sweeteners, which included interest-free loans and discount leases, were introduced after the company's disastrous handling of complaints involving defective brakes and accelerators. "Toyota's strong sales performance in March reflects our customers' continued confidence in the safety and reliability of our vehicles, and their trust in the brand," said Don Esmond, a senior executive for Toyota Motor Sales USA. In China, March sales of Toyota cars rose 33% from last year, and by 51% in Japan, where many bought new models before the most generous government incentives expired at the end of March. Having walked headlong into a storm of media criticism over its handling of the recall crisis, the notoriously secretive company recently mounted a rare diplomatic offensive. On the day it launched its special committee for global quality, Toyota gave about 100 Japanese and overseas journalists unprecedented access to its headquarters in central Japan to view its quality control facility. Among the technology on show was a CT scanner that, oddly, showed a 3D image of a golf ball rather than a car part, to demonstrate its ability to detect hairline cracks. Reporters were also shown an area that simulates torrential rain via 400 specially positioned nozzles and a room that tests vehicles' resistance to extreme temperatures. The spirit of transparency went only so far, however. Visitors had their camera-equipped mobile phones confiscated before entering the complex; and they were made to wear bright yellow baseball caps in case anyone should decide to go walkabout. When one journalist asked a quality control employee if he had taken receipt of potentially defective accelerator pedals, he was quickly ushered away. And the company's PR minders ensured that the firm's president, Akio Toyoda, avoided questions from "difficult" reporters during a post-tour press conference. The new 50-member committee has appointed chief quality officers for Japan, North America, China, Europe and other sales regions who will investigate customer complaints and tighten scrutiny of safety issues at every stage, from design and development to sale and service. Twenty dedicated technology facilities will be opened around the world to gather information on defects; Toyota currently has just one outside Japan, in North America. The company is also considering making English its in-house language. In a significant shift from Toyota's Japan-centric corporate culture, regional quality subcommittees will, in theory, have the authority to make improvements without waiting for instructions from HQ. "Over the last few months, we really learned that we were not close enough to the customers," Toyoda said. "Listening to consumer voices is most important in regaining credibility from our customers. "We are setting up a system to respond more quickly to complaints. Toyota's products are our lifeline. That much is clear from recent events." The new body will enlist outside experts, including former US transport secretary Rodney Slater, to review its performance, with the first report expected in June. In a direct response to recent safety fears, Toyota will increase the use of event data recorders to determine the cause of accidents and install brake override systems – which prevent runaway car accidents – in all new models from this year. Toyota's safety debacle highlighted the pitfalls of pushing production to breaking point to meet soaring global demand for Japanese cars over the past decade. Nissan, the country's third-biggest carmaker, has also been affected by quality problems recalling more than half a million cars last month because of problems with brakes and petrol gauges. But the carmaker, which recently opened its design offices to reporters, said that its shift to digital technology, not production shortcuts, had been responsible for reducing the time between designing a new car and putting it on the market. "If we had reduced development time using existing processes then, yes, we would have had to compromise in certain areas," said Shiro Nakamura, a Nissan executive in charge of design. "Each car's body structure, data, quality and safety are being confirmed digitally – we are compressing time, not ignoring quality and safety." Despite its sales boost, Toyota is not out of the woods yet. It still faces a string of class-action lawsuits that could cost it billions of dollars, and the firm has yet to learn the full extent of the damage to its profit margin from the biggest discount package in its history. Last week's closure of the New United Motor Manufacturing Inc, its 25-year joint venture with General Motors in California, is unlikely to endear the firm to the American public, particularly among the 4,700 Nummi workers now looking for new jobs.