In the past decade Toyota has raised capacity by half to 10m units a year, overtaking General Motors as the world's largest carmaker. Some say this has been its downfall. Toyota let its much-vaunted quality slip by using more standardised parts across many models to make production leaner.

In some markets, the company has recently had to recall cars faster than it produces them. Since November, it has identified 6m vehicles in North America whose accelerator pedals can jam, more than three times the number it sold there last year. Up to 1.8m are to be recalled in Europe. As Toyota halts further sales of affected models, rivals are swooping in to snatch its customers: GM, Ford, and Hyundai have offered $1,000 rebates for traded-in Toyotas.

A recall is a routine occurrence in the industry. What is damaging for investors is that Toyota failed to prevent it from turning into a public relations disaster. Top executives were slow to appear in public to assuage customers' fears at the first sign of trouble. This may not be the Japanese way, but that is no excuse for a global company.

What is more, Toyota's problems have been a slowly unfolding accident for which it should have prepared: it recalled more than 2m US cars as early as 2005. The current steady stream of new problems - a probe has been launched into the Prius' braking system - and speculation that more is to come fuel suspicions that Toyota is insufficiently forthcoming about defects.

Inadequate
The public may forgive an honest mistake, but not what it sees - justifiably or not - as complacency or incompetence on safety. It need not have come to this. That Toyota now risks losing its reputation for quality for good is proof of inadequate management.

In the midst of all this, Toyota incredibly raised its profit forecast yesterday. It said an estimated Y180bn loss on the recall and sales stop would not prevent a return to the black this year. There may be no exact Japanese word for chutzpah; but between daitan (boldness) and atsukamashii (shamelessness) investors must surely prefer rather less of the latter.