Toyota Motor Corp said it would recall some 3.8 million vehicles in the US because of the risk that a loose floormat could force down the accelerator, a problem suspected of causing crashes that have killed five people.
The recall includes the hot-selling Prius hybrid and would be the largest ever for Toyota, which has built a reputation for safety and quality that helped it surpass General Motors as the world’s top automaker last year.
The US government said it has received reports of 100 related incidents that include 17 crashes and five fatalities involving Toyota vehicles.
PHOTO: REUTERS
Toyota said it was too early to provide a cost estimate for the move.
Deutsche Securities auto analyst Kurt Sanger estimated the cost at a modest ¥5 billion to ¥10 billion (US$50 and US$100 million), saying the bigger worry was its image.
“Monetarily I wouldn’t expect it to be a major issue for Toyota,” he said, noting that labor costs, which typically make up the bulk of recalls, would likely be minimal. “The bigger concern is reputational.”
SHARES DOWN
Toyota shares were down 1.1 percent in Tokyo yesterday, underperforming a 0.2 percent fall in the main Nikkei average and a rise in rival Japanese car stocks.
Toyota spokesman Yuta Kaga in Tokyo said the floormats subject to the recall are used only in vehicles sold in the US.
The company is also checking whether the problem originates in the floormats or the process of placing them in the vehicles, he said, without naming the floormat supplier.
Toyota and US safety regulators warned owners to remove all driver-side floormats from eight Toyota and Lexus models manufactured in the last six years as an immediate safety precaution.
Last month, an off-duty California state trooper and three members of his family were killed in the San Diego area in a crash of a 2009 Lexus ES350.
Before the crash, a passenger in the car had called 911 and told dispatchers that the accelerator was stuck and the car had reached 193kph.
The recall will cover the Camry and Avalon sedans, the Prius hybrid, the Tacoma and Tundra pickup trucks and luxury Lexus models, the IS250, the IS350 and the ES350.
PREVIOUS RECALL
Toyota’s largest previous recall was in 2005 for a problem with steering rods, covering about 900,000 vehicles.
The pending recall will be equivalent to about double Toyota’s annual sales in the US market.
“This is a negative issue and is going to cost [Toyota] very much. [It’s] not good for advertising,” said Yuuki Sakurai, CEO of Fukoku Capital Management in Japan.
“But I’m not worried much about this problem and whether it will remain a negative factor for Toyota in the long term. They can overcome it,” he said.
People can preregister to receive their NT$10,000 (US$325) cash distributed from the central government on Nov. 5 after President William Lai (賴清德) yesterday signed the Special Budget for Strengthening Economic, Social and National Security Resilience, the Executive Yuan told a news conference last night. The special budget, passed by the Legislative Yuan on Friday last week with a cash handout budget of NT$236 billion, was officially submitted to the Executive Yuan and the Presidential Office yesterday afternoon. People can register through the official Web site at https://10000.gov.tw to have the funds deposited into their bank accounts, withdraw the funds at automated teller
PEACE AND STABILITY: Maintaining the cross-strait ‘status quo’ has long been the government’s position, the Ministry of Foreign Affairs said Taiwan is committed to maintaining the cross-strait “status quo” and seeks no escalation of tensions, the Ministry of Foreign Affairs (MOFA) said yesterday, rebutting a Time magazine opinion piece that described President William Lai (賴清德) as a “reckless leader.” The article, titled “The US Must Beware of Taiwan’s Reckless Leader,” was written by Lyle Goldstein, director of the Asia Program at the Washington-based Defense Priorities think tank. Goldstein wrote that Taiwan is “the world’s most dangerous flashpoint” amid ongoing conflicts in the Middle East and Russia’s invasion of Ukraine. He said that the situation in the Taiwan Strait has become less stable
CONCESSION: A Shin Kong official said that the firm was ‘willing to contribute’ to the nation, as the move would enable Nvidia Crop to build its headquarters in Taiwan Shin Kong Life Insurance Co (新光人壽) yesterday said it would relinquish land-use rights, or known as surface rights, for two plots in Taipei’s Beitou District (北投), paving the way for Nvidia Corp to expand its office footprint in Taiwan. The insurer said it made the decision “in the interest of the nation’s greater good” and would not seek compensation from taxpayers for potential future losses, calling the move a gesture to resolve a months-long impasse among the insurer, the Taipei City Government and the US chip giant. “The decision was made on the condition that the Taipei City Government reimburses the related
FRESH LOOK: A committee would gather expert and public input on the themes and visual motifs that would appear on the notes, the central bank governor said The central bank has launched a comprehensive redesign of New Taiwan dollar banknotes to enhance anti-counterfeiting measures, improve accessibility and align the bills with global sustainability standards, Governor Yang Chin-long (楊金龍) told a meeting of the legislature’s Finance Committee yesterday. The overhaul would affect all five denominations — NT$100, NT$200, NT$500, NT$1,000 and NT$2,000 notes — but not coins, Yang said. It would be the first major update to the banknotes in 24 years, as the current series, introduced in 2001, has remained in circulation amid rapid advances in printing technology and security standards. “Updating the notes is essential to safeguard the integrity
RSS