"One thing is Toyota began an aggressive schedule to open more production bases overseas but that was the beginning of its problems. To duplicate the quality and fastidiousness of Japanese plants was difficult. They were running to be number one at the expense of quality."
Toyota's well-documented crises of quality from 2009 and 2010 set the company back in consumers' eyes, says Dunne, which has led to challenges from other carmakers.
"The threat from (South Korea's) Hyundai has been well documented. American automakers have boosted quality, innovation and styling too," says Dunne. "For example, the Ford Focus has been a spectacular success. It was the best-selling model in 2012 but Toyota's Corolla had perennially been the best-selling car over the ten years before that."
But Dunne adds Toyota is slowly regaining customer trust after a series of recalls.
In December 2012, Toyota agreed to pay $1.1 billion to settle a class-action suit by car owners who claimed they suffered economic losses because of unintended acceleration in its cars. That same month, the company also agreed to pay a record $17.4 million to the U.S. National Highway Traffic Safety Administration for problems that led to a 2012 recall in one of its Lexus models.
As for direction at the world's largest automaker, Dunne says he has heard good things about the leadership style of Toyota's president and CEO that aims to foster innovation.
"I hear Akio Toyoda enters a room with an entourage of extremely bright engineers and colleagues but he also says 'don't get too burrowed in' and 'let's open our eyes and see what we can do differently'. It seems there's an awakening among the Japanese."