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By Angela Greiling Keane and Makiko Kitamura
<span style="font-size: 17pt">Toyota’s Recalls Test Promise to Make ‘Better Cars’ (Update1) </span>
Nov. 26 (Bloomberg) -- Toyota Motor Corp. plans to fix accelerator pedals on 4.26 million vehicles in the U.S., its biggest recall, as the world’s largest automaker works to fulfill a vow to “make better cars.”
The company will also install automatic brake systems in some vehicles after drivers reported cases of sudden acceleration, the U.S. Transportation Department said yesterday. The recall covers eight models, including Camry, Lexus and Prius cars and Tacoma and Tundra trucks.
Toyota’s recall, at least the third involving more than 100,000 U.S. autos in the past two years, dents a reputation for vehicle quality established in surveys including those by researcher J.D. Power & Associates. Toyota wrested the global sales crown from Detroit-based General Motors Co. last year.
“More recalls may follow,” said Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research company. “Toyota has common parts and platforms across many models, so a defect found in one component has a broad impact.”
The recalls add to the strain of slumping sales brought on by a recession. The Toyota City, Japan-based automaker’s U.S. sales fell 26 percent in the first 10 months of the year.
“We have to listen to our customers and make better cars,” President Akio Toyoda said in a speech to journalists in Tokyo last month. The grandson of Toyota’s founder became president this year.
Recall Cost
The recall, which the company doesn’t plan to extend outside North America, will have little impact on earnings, Toyota spokesman Hideaki Homma said. While the company declined to estimate the cost of the recall, Homma said it won’t exceed the 429 billion yen ($4.9 billion) in provisions set aside for warranties as of March 31.
Toyota shares fell 30 yen, or 0.9 percent, to 3,390 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange.
The company said Nov. 24 it was recalling 110,000 Tundra pickups for frame corrosion that can damage brake lines and dislodge spare tires. The U.S. National Highway Traffic Safety Administration, part of the Transportation Department, had started investigating the flaw.
“The frame issue with the Tundra and Tacoma is an obvious defect,” said Aaron Bragman, a product analyst at IHS Global Insight Inc. in Troy, Michigan. The “unintended acceleration issue is far more nebulous, however. Given the court of public opinion, Toyota has to respond.”
Previous Recalls
In April 2008, Toyota recalled 539,500 of its 2003 and 2004 model-year Corolla and Matrix cars to fix a flaw that could cause the power windows to stop working. In August of this year, it recalled 95,700 of the 2009 and 2010 model-year Corolla, Matrix and Scion xD vehicles for a defect that could cause brakes to fail in cold conditions.
Toyota’s biggest previous recall involved 1.53 million Hilux pickup trucks with faulty steering relay rods. The recall began in Japan in 2004 and was extended to overseas markets in 2005. The company’s largest U.S. recall before this year involved 978,000 vehicles in 2005, also to fix a steering- related flaw.
The U.S.-built Camry is the market’s best-selling passenger car, and the Prius is the world’s most popular gasoline-electric hybrid model, based on sales volume.
Toyota plans to shorten accelerator pedals and will reshape the floor surface under the pedal in some vehicles, Irv Miller, a group vice president for the company’s U.S. sales unit in Torrance, California, said yesterday on a conference call with reporters.
California Deaths
The automaker told U.S. dealers in September to inspect how floor mats were installed after a California Highway Patrol officer and three family members died in a crash near San Diego in a Lexus that may have had a jammed accelerator.
Toyota said in a statement yesterday that it was taking the steps “to address the root cause of the potential risk for floor mat entrapment of accelerator pedals.” The company will develop replacement pedals that will be available for certain models by April. Vehicles that are repaired sooner may still get the new pedals when they are ready.
The automatic brake system for some models would stop the car if the brake and accelerator are depressed at the same time, as would occur if a driver attempted to halt a vehicle with a jammed accelerator.
Even if the repairs won’t affect Toyota’s earnings, “what you’re worried more about is obviously liabilities,” said Kurt Sanger, a Tokyo-based auto analyst at Deutsche Securities Inc.
Class Action Lawsuit
Los Angeles residents Seong Bae Choi and Chris Chan Park, who claim they experienced multiple instances of unintended acceleration, filed a class action lawsuit on Nov. 5, seeking to represent all U.S. owners of certain Toyota and Lexus models. They claim Toyota has failed to correct a problem with the throttle control system on some of its vehicles.
The traffic safety agency had advised owners of the affected Toyota and Lexus vehicles in October to remove floor mats to reduce the risk of accelerator pedals jamming.
The models involved in the recall are the 2007 to 2010 model-year Camry sedans; 2005 to 2010 Avalon sedans; 2004 to 2009 Prius hybrids; 2005 to 2010 Tacoma pickups; 2007 to 2010 Tundra pickups; and Lexus’s 2007 to 2010 ES 350, 2006 to 2010 IS 250 and 2006 to 2010 IS 350 sedans.
The number of recalled vehicles increased from the 3.8 million announced in October because of additional vehicles sold since then, Toyota’s Miller said yesterday.
To contact the reporters on this story: Angela Greiling Keane in Washington at [email protected]; Makiko Kitamura in Tokyo at [email protected]
Last Updated: November 25, 2009 21:23 EST
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<span style="font-size: 17pt">Toyota’s Recalls Test Promise to Make ‘Better Cars’ (Update1) </span>
Nov. 26 (Bloomberg) -- Toyota Motor Corp. plans to fix accelerator pedals on 4.26 million vehicles in the U.S., its biggest recall, as the world’s largest automaker works to fulfill a vow to “make better cars.”
The company will also install automatic brake systems in some vehicles after drivers reported cases of sudden acceleration, the U.S. Transportation Department said yesterday. The recall covers eight models, including Camry, Lexus and Prius cars and Tacoma and Tundra trucks.
Toyota’s recall, at least the third involving more than 100,000 U.S. autos in the past two years, dents a reputation for vehicle quality established in surveys including those by researcher J.D. Power & Associates. Toyota wrested the global sales crown from Detroit-based General Motors Co. last year.
“More recalls may follow,” said Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research company. “Toyota has common parts and platforms across many models, so a defect found in one component has a broad impact.”
The recalls add to the strain of slumping sales brought on by a recession. The Toyota City, Japan-based automaker’s U.S. sales fell 26 percent in the first 10 months of the year.
“We have to listen to our customers and make better cars,” President Akio Toyoda said in a speech to journalists in Tokyo last month. The grandson of Toyota’s founder became president this year.
Recall Cost
The recall, which the company doesn’t plan to extend outside North America, will have little impact on earnings, Toyota spokesman Hideaki Homma said. While the company declined to estimate the cost of the recall, Homma said it won’t exceed the 429 billion yen ($4.9 billion) in provisions set aside for warranties as of March 31.
Toyota shares fell 30 yen, or 0.9 percent, to 3,390 yen as of the 11 a.m. trading break on the Tokyo Stock Exchange.
The company said Nov. 24 it was recalling 110,000 Tundra pickups for frame corrosion that can damage brake lines and dislodge spare tires. The U.S. National Highway Traffic Safety Administration, part of the Transportation Department, had started investigating the flaw.
“The frame issue with the Tundra and Tacoma is an obvious defect,” said Aaron Bragman, a product analyst at IHS Global Insight Inc. in Troy, Michigan. The “unintended acceleration issue is far more nebulous, however. Given the court of public opinion, Toyota has to respond.”
Previous Recalls
In April 2008, Toyota recalled 539,500 of its 2003 and 2004 model-year Corolla and Matrix cars to fix a flaw that could cause the power windows to stop working. In August of this year, it recalled 95,700 of the 2009 and 2010 model-year Corolla, Matrix and Scion xD vehicles for a defect that could cause brakes to fail in cold conditions.
Toyota’s biggest previous recall involved 1.53 million Hilux pickup trucks with faulty steering relay rods. The recall began in Japan in 2004 and was extended to overseas markets in 2005. The company’s largest U.S. recall before this year involved 978,000 vehicles in 2005, also to fix a steering- related flaw.
The U.S.-built Camry is the market’s best-selling passenger car, and the Prius is the world’s most popular gasoline-electric hybrid model, based on sales volume.
Toyota plans to shorten accelerator pedals and will reshape the floor surface under the pedal in some vehicles, Irv Miller, a group vice president for the company’s U.S. sales unit in Torrance, California, said yesterday on a conference call with reporters.
California Deaths
The automaker told U.S. dealers in September to inspect how floor mats were installed after a California Highway Patrol officer and three family members died in a crash near San Diego in a Lexus that may have had a jammed accelerator.
Toyota said in a statement yesterday that it was taking the steps “to address the root cause of the potential risk for floor mat entrapment of accelerator pedals.” The company will develop replacement pedals that will be available for certain models by April. Vehicles that are repaired sooner may still get the new pedals when they are ready.
The automatic brake system for some models would stop the car if the brake and accelerator are depressed at the same time, as would occur if a driver attempted to halt a vehicle with a jammed accelerator.
Even if the repairs won’t affect Toyota’s earnings, “what you’re worried more about is obviously liabilities,” said Kurt Sanger, a Tokyo-based auto analyst at Deutsche Securities Inc.
Class Action Lawsuit
Los Angeles residents Seong Bae Choi and Chris Chan Park, who claim they experienced multiple instances of unintended acceleration, filed a class action lawsuit on Nov. 5, seeking to represent all U.S. owners of certain Toyota and Lexus models. They claim Toyota has failed to correct a problem with the throttle control system on some of its vehicles.
The traffic safety agency had advised owners of the affected Toyota and Lexus vehicles in October to remove floor mats to reduce the risk of accelerator pedals jamming.
The models involved in the recall are the 2007 to 2010 model-year Camry sedans; 2005 to 2010 Avalon sedans; 2004 to 2009 Prius hybrids; 2005 to 2010 Tacoma pickups; 2007 to 2010 Tundra pickups; and Lexus’s 2007 to 2010 ES 350, 2006 to 2010 IS 250 and 2006 to 2010 IS 350 sedans.
The number of recalled vehicles increased from the 3.8 million announced in October because of additional vehicles sold since then, Toyota’s Miller said yesterday.
To contact the reporters on this story: Angela Greiling Keane in Washington at [email protected]; Makiko Kitamura in Tokyo at [email protected]
Last Updated: November 25, 2009 21:23 EST
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