Um, Toyota? The idea was for you to get us to take your cars. Not the other way around.

A couple weeks back, I offered a tongue-in-cheek welcome to Tesla Motors (Nasdaq: TSLA), as it joins the ranks of publicly traded automakers who've undergone the trial by fire of navigating a car recall. This morning, though, Toyota Motor (NYSE: TM) gave Tesla an object lesson in just how far it still has to come to play in the majors:


Tesla's recall is so small that it literally doesn't register on any scale showing the size of Toyota's latest gaffe. Citing a range of problems newly discovered -- problems with fuel pumps, problems with the brake fluid -- Toyota this morning announced it must recall 740,000 Lexus, Avalon, and Highlander models in the U.S., 599,000 cars in Japan proper, and another 190,000-odd cars in Europe and elsewhere around the globe.

But even this doesn't tell the whole story. Weighing in at 1.53 million units, today's recall represents only a small fraction of the 10-million-plus automobiles Toyota has already had to recall this year, for problems ranging from sticky gas pedals to poorly designed floor mats.

The price of failure
It's hard to overestimate how bad this fiasco is for Toyota. Already this year, the company has said recalls related to its various "issues" alone will cost it $2 billion in charges to earnings. But the damage goes further. For millions (at this rate, we'll soon have to say "tens of millions") of potential car buyers, their most recent experience with Toyota will be the fright of receiving a recall letter in the mail, the frustration of having to arrange for rides to and from the shop to get their cars fixed, and the lost wages of hours spent away from the office. Not the kinds of things you want shoppers thinking about as they ponder the purchase of their next car.

And the hit to Toyota's hard-earned reputation for quality won't stop there. For years, Toyota has striven to assure the dominance of its Prius hybrid electric drivetrain, inking deals licensing its technology to Ford (NYSE: F), Nissan -- the list goes on. But if Toyota loses its reputation for having "the best tech," this could encourage Toyota's rivals to develop their own hybrid systems, hurting sales volumes for Prius-compatible parts, driving up the cost of production -- and driving down Toyota's profit margin.

Far from moving forward, Toyota looks to me like it's slipping downhill.

At least that's my take on the latest recall. But maybe you see something different in today's chart? Take the Foolish Rorschach test. Tell us about it below.

Ford Motor is a Motley Fool Stock Advisor selection, but Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.

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