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Toyota plans recall; may cost $228 mn: Paper

Toyota plans recall; may cost $228 mn: Paper
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First Published: Fri, Jul 02 2010. 01 07 PM IST
Updated: Fri, Jul 02 2010. 01 07 PM IST
Tokyo/Detroit: Toyota Motor Corp may recall up to 270,000 vehicles worldwide to fix an engine glitch, with Japan’s Asahi newspaper reporting the move could cost the car maker up to yen20 billion ($228 million).
Toyota said it would file the recall in Japan on Monday, covering 90,000 high-end sedans, as the world’s largest automaker continues to ramp up its safety oversight following a string of recalls.
An official at Japan’s transport ministry said he had been informed that Toyota was also planning a recall in North America and Europe. Toyota officials in the United States said an internal investigation will be completed next week into the engines, but they did not say whether the cars would be recalled.
Toyota declined to confirm the reported cost estimate for the recalls, which would amount to a relatively steep yen74,000 ($844) a vehicle.
Since last September, Toyota has been plagued by a safety crisis that has led to the recall of more than 10 million vehicles globally, mostly for potential unintended acceleration. About 7.3 million vehicles have been recalled in the United States, the automaker’s biggest market.
Shares in Toyota were resilient on Friday, ending up 0.3% at yen3,020, in line with Tokyo’s Topix index.
“The latest quality problem is a selling factor, but the stock is already at a level where further falls are hard to come by,” said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
“Investors thought Toyota had implemented a thorough quality control system, and the market’s reaction is, ‘is this happening again?´ But we also have to keep in mind that automakers are always recalling cars and most don’t get reported widely.”
The latest potential safety defect covers seven Lexus sedan models and the Toyota Crown sedan whose engines could stall in rare cases due to faulty valve springs. About half of the 270,000 vehicles were sold in the United States.
No accidents or injuries have been reported, Toyota said.
The Lexus models in the possible stalling issue are the GS 350, GS 450h, GS 460, IS 350, LS 460, LS 600h and LS 600hl. The models marked by “h” are gasoline-electric hybrids.
The US National Highway Traffic Safety Administration had not received any communication from Toyota regarding the issue by Thursday, a Department of Transportation spokeswoman said.
The recall would be the second for the luxury Lexus brand since last Friday, when Toyota told US and Canadian safety regulators it was halting sales and recalling about 17,000 Lexus HS 250h hybrid sedans due to a potential fuel leak.
Toyota acted following a US government crash test that showed fuel leaking after an HS 250h was struck from the rear by a car traveling about 80 kph. Toyota’s own crash test did not show the fuel leak problem.
The automaker told dealers it had not received any reports of injuries or accidents linked to the problem with the HS 250h.
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First Published: Fri, Jul 02 2010. 01 07 PM IST
More Topics: Toyota | Cars | Automakers | Japan | Corporate News |