Business

Sources: Toyota to recall Prius this week

(China Daily)
Updated: 2010-02-09 07:44

Move would further tarnish firm's already battered reputation

TOKYO: Toyota Motor Corp will recall its 2010 model Prius hybrid car in Japan this week to repair a problem with the vehicle's braking system, two people familiar with the matter said, adding to global recalls of almost 8 million autos for separate defects.

The world's largest automaker plans to recall at least 270,000 of the gasoline-electric hatchbacks in Japan and the US, one person said, declining to be identified as the information isn't yet public. Juergen Stolze, a Toyota spokesman in Germany, said the carmaker will decide whether to recall Prius cars in Europe by Feb 10.

A Prius recall may further tarnish Toyota's reputation after the Toyota City, Japan-based company lost about $33 billion in market value amid expanding global recalls of other models.

Those recalls have yet to include any vehicles in Japan, where the Prius was last year's top-selling model.

"It's really shocking," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd in Tokyo. "The damage to Toyota will be big."

Ririko Takeuchi, a spokeswoman for Toyota in Tokyo, said the company hasn't decided whether to recall the Prius. Stolze, speaking by phone from Cologne, Germany, declined to say what the carmaker's decision will be regarding recalls in Europe. There haven't been any proven cases of brake failures in the Prius in Europe, he said.

'Kind of scary'

Japan's government ordered Toyota to investigate the Prius after receiving complaints from drivers. The company has been looking into reports that Prius owners driving at low speeds on bumpy or icy roads may experience moments where the car continues to coast for about a second after the brakes are applied, because of the anti-lock brake system.

"It sounds kind of scary," said Steve Wozniak, co-founder of Apple Inc, who drives a 2010 Prius. "You sure don't want your car to continue on an icy road, when it's supposed to be stopping."

The New York Times reported that Toyota will recall at least 311,000 Priuses. Toyota has sold at least 332,000 units of the 2010 Prius, including 197,000 in Japan and 103,200 in the US, spokesman Takanori Yokoi said. The model is built in Japan.

Sai, Lexus

Toyota also plans to recall Lexus HS250h and Sai hybrid models in Japan this month, one of the people said. The company is considering steps dealers can take for current Prius owners, including exchanging some parts, the person said.

Toyota fell 1.1 percent to close at 3,280 yen in Tokyo trading yesterday. The stock has declined 22 percent since Jan 21, when the carmaker began recalling vehicles to fix gas pedals linked to unintended acceleration.

Wozniak, 59, who said earlier this month he had also experienced incidents of unintended acceleration in his Prius, said he would probably take the car to a dealer to have the brake system checked, "but not right away".

He said the reports that have led to recalls of Toyota vehicles aren't statistically significant and that he remains a fan of the Prius because of its environmental benefits.

"All these problems should get fixed, but they shouldn't stop people from buying the Prius," Wozniak said in a phone interview. "There are bugs in every product."

US investigation

Toyota said last week it had received complaints about Prius brakes through dealers starting in the last few months of 2009. Toyota changed the design of the brake software at the end of January, the company said.

The US Transportation Department is also investigating reports of brake failures in the model. The department's National Highway Traffic Safety Administration received 124 reports from consumers, including four saying crashes occurred with two "minor" injuries, according to an investigation document.

The brake complaints aren't related to the reports of unintended acceleration in the US, according to Toyota's Takeuchi.

Toyota has recalled at least 7.8 million vehicles on five continents to repair defects that have been linked to unintended acceleration. Those recalls may cut demand for the company's vehicles by 100,000 units, Toyota has said.

The company last week predicted a return to profit in the fiscal year ending March 31, even as it said recalls may cost 100 billion yen ($1.1 billion). The full-year net income forecast of 80 billion yen takes into account recalls for flaws linked to unintended acceleration, though it doesn't include potential Prius recalls, Toyota said at the time.

Toyota faces at least 29 lawsuits filed on behalf of customers in the US and Canada seeking a range of damages from loss of car value to a return of profits. It also faces at least 10 lawsuits brought by individuals claiming deaths or injuries caused by uncontrollable acceleration.

Sudden acceleration of Toyota vehicles has been linked to 19 deaths in the last decade, according to Henry Waxman, the US House of Representatives' Energy and Commerce Committee chairman.

Bloomberg News

(China Daily 02/09/2010 page14)