Toyota Halts U.S. Sale, Output of 8 Models as Image ‘Tarnished’
01-26-2010 | 05:58 PM
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LickMyButthole
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Toyota Halts U.S. Sale, Output of 8 Models as Image ‘Tarnished’
LINK: http://www.businessweek.com/news/201...arnished-.html
January 26, 2010, 08:29 PM EST
By Alan Ohnsman
Jan. 27 (Bloomberg) -- Toyota Motor Corp., struggling to stem widening quality concerns, will suspend production and U.S. sales of eight models that use a component that triggered a recall of 2.3 million vehicles.
Dealers will temporarily stop selling RAV4, Highlander and Sequoia sport-utility vehicles, Corolla, Camry, Avalon and Matrix cars and Tundra pickups, Toyota, the world’s largest carmaker, said in a statement yesterday. Assembly lines at five North American plants will be idled the week starting Feb. 1. Mike Goss, a company spokesman, said he couldn’t immediately say how many units of production would be lost.
“Toyota had a bulletproof reputation for quality, and now it’s been tarnished,” said Jim Hossack, an industry analyst at AutoPacific Inc. in Fountain Valley, California. “It’s a dramatic move, and an expensive move.”
Toyota’s Jan. 21 announcement that it will recall more vehicles in the U.S. and Canada raises pressure on President Akio Toyoda to restore the company’s reputation. The carmaker’s U.S. sales fell 20 percent last year while those of South Korean rival Hyundai Motor Co., which is catching up with the Japanese carmaker in U.S. quality surveys, gained 8.3 percent.
Toyota declined as much as 3.4 percent to 3,740 yen on the Tokyo Stock Exchange and traded at 3,780 yen as of 9:54 a.m. local time. Honda Motor Co., Japan’s second-biggest carmaker, gained 0.2 percent while Hyundai rose 2.3 percent in Seoul. Japan’s Nikkei 225 Stock Average advanced 0.2 percent.
Record Recall
Toyota said last week it would recall vehicles in the U.S. and Canada because of a potential flaw in parts made by CTS Corp. that could, “in rare instances, mechanically stick in a depressed position or return slowly to the idle position.”
In November, Toyota recalled a record 4.3 million vehicles to reshape accelerator pedals to prevent them from getting stuck by driver-side floor mats. About 1.7 million vehicles are affected by both recalls.
Halting sales and production of some of Toyota’s best- selling U.S. models may mean hundreds of millions of dollars in lost revenue, said AutoPacific’s Hossack, a former engineer for Ford Motor Co., Chrysler Corp. and Mazda Motor Corp.
“Toyota needed to send a clear message they care more about their customers than monthly profits,” said Jeremy Anwyl, chief executive of Edmunds.com, a Web-based auto data service in Santa Monica, California. “The company has to get ahead of the problem.”
Production Halt
The eight models involved accounted for 56 percent of Toyota’s U.S. sales last year, said Koji Endo, managing director of Advanced Research Japan in Tokyo.
“On top of losing sales, stopping production means Toyota still has to deal with costs such as worker wages and depreciation,” Endo said. “The full extent of the damage depends on how long it will take.”
The announcements have fueled concern that rapid expansion by the Toyota City, Japan-based company in the past decade led to production and design glitches, risking its reputation for quality.
“Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company,” Bob Carter, group vice president of Toyota’s U.S. sales unit, said in the statement. “This action is necessary until a remedy is finalized.”
Toyota has said it’s still investigating the cause of the pedal flaw and hasn’t yet determined a precise fix. Toyota said yesterday it may extend recalls to Europe where models using similar pedal components have been sold.
The company’s U.S. sales headquarters are based in Torrance, California.
--With assistance from Makiko Kitamura in Tokyo. Editors: Terje Langeland, Patrick Harrington.
January 26, 2010, 08:29 PM EST
By Alan Ohnsman
Jan. 27 (Bloomberg) -- Toyota Motor Corp., struggling to stem widening quality concerns, will suspend production and U.S. sales of eight models that use a component that triggered a recall of 2.3 million vehicles.
Dealers will temporarily stop selling RAV4, Highlander and Sequoia sport-utility vehicles, Corolla, Camry, Avalon and Matrix cars and Tundra pickups, Toyota, the world’s largest carmaker, said in a statement yesterday. Assembly lines at five North American plants will be idled the week starting Feb. 1. Mike Goss, a company spokesman, said he couldn’t immediately say how many units of production would be lost.
“Toyota had a bulletproof reputation for quality, and now it’s been tarnished,” said Jim Hossack, an industry analyst at AutoPacific Inc. in Fountain Valley, California. “It’s a dramatic move, and an expensive move.”
Toyota’s Jan. 21 announcement that it will recall more vehicles in the U.S. and Canada raises pressure on President Akio Toyoda to restore the company’s reputation. The carmaker’s U.S. sales fell 20 percent last year while those of South Korean rival Hyundai Motor Co., which is catching up with the Japanese carmaker in U.S. quality surveys, gained 8.3 percent.
Toyota declined as much as 3.4 percent to 3,740 yen on the Tokyo Stock Exchange and traded at 3,780 yen as of 9:54 a.m. local time. Honda Motor Co., Japan’s second-biggest carmaker, gained 0.2 percent while Hyundai rose 2.3 percent in Seoul. Japan’s Nikkei 225 Stock Average advanced 0.2 percent.
Record Recall
Toyota said last week it would recall vehicles in the U.S. and Canada because of a potential flaw in parts made by CTS Corp. that could, “in rare instances, mechanically stick in a depressed position or return slowly to the idle position.”
In November, Toyota recalled a record 4.3 million vehicles to reshape accelerator pedals to prevent them from getting stuck by driver-side floor mats. About 1.7 million vehicles are affected by both recalls.
Halting sales and production of some of Toyota’s best- selling U.S. models may mean hundreds of millions of dollars in lost revenue, said AutoPacific’s Hossack, a former engineer for Ford Motor Co., Chrysler Corp. and Mazda Motor Corp.
“Toyota needed to send a clear message they care more about their customers than monthly profits,” said Jeremy Anwyl, chief executive of Edmunds.com, a Web-based auto data service in Santa Monica, California. “The company has to get ahead of the problem.”
Production Halt
The eight models involved accounted for 56 percent of Toyota’s U.S. sales last year, said Koji Endo, managing director of Advanced Research Japan in Tokyo.
“On top of losing sales, stopping production means Toyota still has to deal with costs such as worker wages and depreciation,” Endo said. “The full extent of the damage depends on how long it will take.”
The announcements have fueled concern that rapid expansion by the Toyota City, Japan-based company in the past decade led to production and design glitches, risking its reputation for quality.
“Helping ensure the safety of our customers and restoring confidence in Toyota are very important to our company,” Bob Carter, group vice president of Toyota’s U.S. sales unit, said in the statement. “This action is necessary until a remedy is finalized.”
Toyota has said it’s still investigating the cause of the pedal flaw and hasn’t yet determined a precise fix. Toyota said yesterday it may extend recalls to Europe where models using similar pedal components have been sold.
The company’s U.S. sales headquarters are based in Torrance, California.
--With assistance from Makiko Kitamura in Tokyo. Editors: Terje Langeland, Patrick Harrington.
01-27-2010 | 03:51 AM
#6
S a D u B
Joined: Apr 2008
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From: Harrisonburg, VA
Re: Toyota Halts U.S. Sale, Output of 8 Models as Image ‘Tarnished’
So how long will this last? I mean, I get why they are doing it, but I wouldn't think it'd take long to make a new accelerator pedal and get rolling again 
Toyota has always been such a strong car manufacturer, sucks to see this happening. O well, that's the cost of business.
Toyota has always been such a strong car manufacturer, sucks to see this happening. O well, that's the cost of business.
01-27-2010 | 04:37 AM
#8
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From: Williamsburg
Re: Toyota Halts U.S. Sale, Output of 8 Models as Image ‘Tarnished’
All because the accelorator pedal gets stuck under the floor mat? What car can't that happen in? I thought thats why the factory carpeting has hooks to hold the floor mats down in place?
.
01-27-2010 | 04:41 AM
#10
S a D u B
Joined: Apr 2008
Posts: 6,990
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From: Harrisonburg, VA
Re: Toyota Halts U.S. Sale, Output of 8 Models as Image ‘Tarnished’
Yeah, I think they're getting the dick sandwich. Sounds like it's all a cowinkydink but rather than be blamed for peoples deaths and continue getting sued they're giving in. IDK, floormats and gas pedals have always been a potential issue, in any car. Altho, if it's being held by hooks, then I guess it shouldn't be getting caught.