Toyota Motor Corp will suspend US sales of eight models subject to a massive safety recall, an unprecedented move that sent its shares tumbling and raised questions about the timing of its earnings recovery.
Toyota said it would also halt production of the models, including the best-selling Camry, at plants in the US and Canada in the first week of February.
Shares in the world’s biggest automaker suffered their biggest slide in eight months, falling 4.3 percent in a Tokyo market down 0.7 percent yesterday.
PHOTO: EPA
Last week, Toyota announced it would recall 2.3 million vehicles in the US to fix potentially faulty accelerator pedals, its second large recall in four months in the US, its biggest market.
The series of recalls threaten to damage Toyota’s reputation for safety and quality that helped it ascend to the top of the global auto industry.
“This unprecedented automotive decision indicates how serious a safety problem this is,” said Michelle Krebs, senior analyst at Edmunds.com. “We’ve gone from floormats to recalls for wear items to a full shutdown, and I can’t help but think that the company’s credibility is being called into question.”
Toyota said the production halt would initially last a week before being reviewed. Officials could not recall a sales or production suspension resulting from vehicle defects on such a scale.
Toyota is considering whether it needs to issue a recall in Europe as well, where the same parts are used for some models.
The sales and production suspension could also affect its earnings in the near term.
“The recall itself won’t be a big problem for Toyota’s earnings, but suspending production and sales could have a big impact depending on how long it lasts,” said Koji Endo, an auto analyst at Advanced Research Japan.
The sales suspension and recall includes Toyota’s top-selling vehicle in North America, the Camry, for model years since 2007.
Also included are the 2009 and 2010 model RAV4, Corolla and Matrix, the 2008 through 2010 Sequoia, the 2007 through 2010 Tundra, the 2005 to 2010 Avalon and the 2010 Highlander.
Annual combined sales of these models are 1 million cars in North America, more than half of Toyota’s annual sales there last year, according to Endo. It is more than 2,700 units a day or 19,000 cars a week.
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