Friday, February 25, 2011

Toyota recalls 2.2 million vehicles for gas pedal stick

Toyota Motor Corp recalled nearly 2.2 million vehicles, citing a defect that could cause gas pedals to stick, in an extension of the safety crisis that has hounded the world's top automaker for more than a year.
The surprise action on Thursday extended a damaging string of recalls covering 19 million Toyota vehicles worldwide since 2009, mainly over complaints of unintended acceleration linked to defective floormats and gas pedals.

The additional recalls covered several Toyota and Lexus models and renewed questions about quality at the world's largest automaker and its ability to shake the stubborn safety crisis that has undermined sales and tarnished its brand.

The total of Toyota vehicles recalled in the United States on Thursday topped the nearly 1.8 million cars and trucks that the top global automaker sold here in 2010.

The new recalls come just over two weeks after US safety regulators cleared Toyota by announcing that a 10-month study had concluded that the company's electronic controls were not to blame for reported episodes of runaway acceleration as safety advocates and some members of Congress had suspected.

"They want to put this behind them," said Scott Painter, chief executive of auto buyer resource TrueCar.com. "They have been affected financially and are trying to get customers back."

Toyota's US market share fell from 17 per cent at the end of 2009 to just more than 15 per cent in December 2010. It has been forced to discount more heavily to attract buyers.

Painter said the new recall could have a short-term chill on buyers but will help Toyota over the long term, especially since Thursday's development was followed by a statement from regulators that they have concluded their investigation of the matter.

Toyota shares fell 7 cents to close at $90.10 on the New York Stock Exchange.

Shuba Srinivasan, a marketing expert at Boston University School of Management, said Toyota was taking a step "in the right direction" to regain public trust and rebuild its brand.

Mike Rozembajgier, vice president of recalls for ExpertRECALL, said Toyota will continue to be under the safety spotlight and must be "extra cautious to ensure that they've got the appropriate recall plans in place."

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