Toyota Admits Prius Flaw as Recall Bill Mounts

Feb. 4, 2010
Total recall bill will be $2 billion

Toyota admitted on Feb. 4 there was a brake design flaw with its Prius hybrid, in a major new blow to the world's top automaker, already facing a two-billion-dollar bill from massive safety recalls.

The brake trouble comes on top of accelerator pedal problems that have now spread to Britain and raised fresh questions about whether Toyota sacrificed quality in its drive to overtake General Motors as world number one.

The company said it had redesigned the anti-lock braking system (ABS) -- designed to prevent skidding -- for the latest version of its Prius produced since last month and would soon announce steps for those already on the road.

The glitch could hardly have come at a worse time for the Japanese giant.

Toyota is under fire in the United States for its handling of massive recalls affecting about eight million vehicles worldwide -- more than its entire 2009 global sales of 7.8 million vehicles -- due to accelerator trouble.

Despite the huge recalls, the Japanese giant said it was on course to earn 80 billion yen (US$880 million) this fiscal year after posting a net profit of 153.2 billion yen in October-December.

But recall costs and lost sales are expected to slash profits by up to about 180 billion yen (US$2 billion) in the current financial year to March, the company said as it came in for ferocious criticism in the United States.

Transportation Secretary Ray LaHood on Feb. 4 vowed that U.S. officials will "continue to hold Toyota's feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe". LaHood caused a brief furror when he said that owners of Toyotas affected by the accelerator defect should "stop driving" them and take them to a dealer. He later called the remark "obviously a misstatement".

Members of the U.S. Congress have scheduled hearings into Toyota's recall crisis, and want proof that the problems with the accelerator pedal are mechanical and not a more complex one related to electronics or software.

U.S. authorities meanwhile have reported more than 100 complaints of brake problems on the Prius, while Toyota said it had received 77 complaints in Japan.

At a hastily scheduled news conference after its earnings announcement, Toyota said it would soon unveil safety measures relating to the Prius brakes. "We'll make an announcement before long," said Hiroyuki Yokoyama, a Toyota managing officer in charge of quality control. "The brakes are slow but if you continue to step on them, the car will stop," he said.

Toyota denied it had dragged its feet on revealing the problem, saying the initial reports of trouble were only received late last year. "From around December, the number of complaints increased because of the icy weather," Yokoyama said.

Toyota said it was also now recalling cars in Britain across seven model ranges owing to the faulty accelerators. It did not specify the figure, which newspapers said could total almost 180,900 vehicles.

Copyright Agence France-Presse, 2010

See Also
U.S. Chides Toyota on Recall
Canadians Launch Class Action Against Toyota and CTS
Toyota Says Global Expansion Not to Blame for Recall
All Toyota Brake Recall Articles

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!