Toyota Motor’s unprecedented recall of millions of vehicles with faulty accelerators is already taking a toll on its sales and may force it to cut this year’s sales forecasts.
Toyota Motor’s head of quality said he did not know how much it would cost to recall and fix millions of vehicles with faulty accelerators, but acknowledged sales were suffering.
In the first public comment from an executive at Toyota’s head office, executive vice president Shinichi Sasaki said costs were not taken into account with the recall of nearly 4.5 million vehicles equipped with faulty accelerators in North America and Europe.
PHOTO: REUTERS
“The sales forecast is something that we’re extremely worried about,” he told a news conference in the central Japanese city of Nagoya yesterday.
“Already, I am hearing that sales have been affected somewhat in January,” he said, adding that the company would report its third-quarter earnings tomorrow.
On Monday, the world’s biggest automaker detailed its plans to fix the faulty pedals with a small metal shim, or spacer, to prevent them from sticking and causing unintended acceleration.
On top of a separate recall for slipping floormats also linked to unintended acceleration, almost 8 million vehicles worldwide are being recalled.
Toyota, fighting to preserve its reputation for quality, said it would restart production of eight models including its popular Camry, Corolla and Rav4 models on Monday after an unprecedented one-week shutdown at six plants in the US and Canada.
Sasaki, who appeared alone in front of more than 100 reporters, said there had been a bigger-than-usual sales impact from the recall.
Toyota said last month it expected global auto sales to rise 6 percent this year, but has said the forecast did not take the recall impact into account.
Sasaki said they would monitor sales before reviewing this year’s sales forecast.
Toyota president Akio Toyoda, the grandson of the company’s founder, has not formally addressed the public or media on the recall problems. While in Davos, Switzerland, last weekend, he appeared briefly on broadcaster NHK and apologized to consumers.
The costs for the recall and the shutdown now look to come to roughly ¥100 billion to ¥200 billion (US$1.1 billion to US$2.2 billion), two analysts estimated.
“It’s a positive that we now can grasp what the direct costs might be, but Toyota has yet to address uncertainties about indirect costs, such as litigation costs and costs of incentives to win back customers,” JP Morgan analyst Kohei Takahashi said.
“The size of these indirect costs is of far greater importance” for Toyota’s future, he said.
Shares in Toyota rallied almost 5 percent in Toyko yesterday following the company’s US announcement on the fix and restart for production. The jump in its shares comes after about an 18 percent tumble over the last seven business days.
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