Toyota Motor Corp faced scrutiny from the US Congress over its biggest ever safety recall as investors and consumers weighed the impact of an unprecedented halt in US production by the No. 1 automaker.
US House Energy and Commerce Committee Chairman Henry Waxman said he would hold a hearing next month to consider “how quickly and effectively” the car maker responded to complaints about unintended and dangerous acceleration.
“Like many consumers, I am concerned by the seriousness and scope of Toyota’s recent recall announcements,” Waxman said in a statement.
The unusual action by the US government came just hours after the Toyota recall for accelerator problems was widened to include China and Europe.
Toyota this week suspended North American sales and production of eight models — including its best-selling Camry after pressure from regulators.
The world’s largest automaker and a company studied for its devotion to quality, Toyota has recalled about 8 million vehicles in recent months — more than the number of cars and trucks it sold worldwide last year.
Analysts said the financial impact would depend on how long the safety problems shut production and whether Toyota’s famously loyal customers begin to abandon the brand, an issue hotly debated on blogs and online forums.
Shares of Toyota have dropped 17.6 percent since Jan. 21, when it announced it was broadening its recalls by a further 2.3 million vehicles. The stock ended down 2 percent in Tokyo yesterday.
Industry analysts and executives estimated it would cost about US$250 million in warranty costs alone to address the smaller of the two recalls under way in the US.
The automaker also faces the fallout from the larger recall that began last year and was broadened this week for vehicles at risk of having floormats that can become jammed under accelerator pedals.
Meanwhile, Toyota said it was racing to fix one of the recurring problems with sticky accelerator pedals that has forced it to shut down sales and production of most vehicles in the US.
In consultations with its dealers on Thursday, Toyota said it would take months to complete repairs on the recalled vehicles since it would send notices to affected customers in batches of ten thousand to avoid overrunning repair shops.
CTS Corp, the manufacturer of the accelerator pedals that led to the sales half, said on Thursday that it has completed work on a redesigned accelerator pedal and was rushing that fixed part into production for Toyota.
Cars sold in Japan use accelerators supplied by Denso Corp. Toyota representatives said it was not clear if Denso could supply enough accelerators to help meet the demand surge caused by the US recall. Denso said it was still reviewing the situation and declined further comment.
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