Toyota Hybrid Cars and Legal Issues
Automobile industry is a faster growing industry nowadays than any other industry. Most car manufacturers face the challenge of providing the best quality products to remain competitive to retain or regain market share during this tough economic times. Every organization has the opportunity to make more profit than their competitors do by improving delivery method and its impact on the company’s turnover. Toyota Corporation has implemented different plans and techniques to remain competitive and make profit. One of the innovative plans Toyota Corp. created is the Prius. The Prius brought about a major revolution in car ...view middle of the document...
With the soaring oil prices and increasing environmental awareness issues around the world, Toyota shifted its outlook toward cleaner and efficient cars. “Then, in the 1990's, while U.S. automakers were building bigger and bigger SUVs and trucks, Toyota threw itself into hybrid gasoline-electric research, investing more than $1 billion in the then-little-known field” (Collier, 2006).
The Hybrid cars are cars that make efficient use of both an internal and combustion engine and another source of energy, such as electricity. Yost and Friedman (2006) claimed that the Prius was the first major hybrid vehicle to hit the car market in 1997. It first hit markets in Japan and in May 1999 it arrived in the United States (Yost and Friedman, 2006). Toyota being the leader in the hybrid market is not surprising because it follows strategy that consists of anticipating future regulations. Fuel cell technology means important investment in research and development. Electric vehicles don’t’ meet the performance of existing vehicles. So hybrid technology seems to be the right compromise for Toyota.
Toyota recalled millions of cars because of admitted acceleration pedal problems and brake problems. Some of the cars affected by the recall include Toyota’s RAV4, Corolla, Matrix, Camry, Highlander SUV, as well as Tundra and Sequoia Trucks (FindLaw, 2010). The US government got involved also and began investigating Toyota Prius brake problems after carmaker admitted that the 2010 Prius had a design defect. Recent law suits by the customers alleged that Toyota was engaged in fraud, negligently manufactured cars, and defectively design vehicle system. Even though the Prius has done well in the U.S markets, almost doublings its profits every year, there are still some legal issues that the Prius has had in the U.S car market.
Toyota Prius is the most popular hybrid vehicles worldwide but the third generation models suffered problems regarding the brake pedals and floor mat which is reported to cause many accidents. About 133,000 latest 2010 model Prius vehicles are called for software update in the vehicle’s anti lock braking system or ABS (Soumitra, 2010). Customers have experienced inconsistent brakes on rough or slick road surfaces. The problem with the brake pedal may increase the risk of crash, for the vehicle stopping distances may increase relative to a customer’s expectation. Toyota has been the top player in the hybrid car segment but the fact that Prius and other hybrid models will be a part of the substantial recall significantly dents its image.
Intellectual Property Protection/Patent Infringement
In 1994, Toyota was sued by Paice, LLC of infringing a patent belong to Paice, LLC. Paice founder Alex Severinsky, a Soviet engineer and immigrant patented a system for powering high-voltage gas- electric hybrid car (Decker and Ohnsman, 2010). Toyota has been using Paice system since 1997...