US steps up pressure on Toyota over design faults
Published 04/02/2010 | 05:00
THE US yesterday stepped up pressure on Toyota to fix defects that have caused the recall of millions of vehicles because they may suddenly accelerate, causing drivers to lose control.
US transportation secretary Ray LaHood told reporters in Washington that he planned to call Toyota boss Akio Toyoda "and explain to him that this is serious business".
He also told a panel of legislators in the US Congress that people should stop driving the recalled vehicles. However, he later rowed back on this, instead urging drivers to have their vehicles fixed by a dealer as soon as possible.
His remarks underscored a growing crisis at Toyota that has caused it to lose $29.5bn (€21.21bn) in market value since the current recalls began. The affair has also tarnished its reputation for quality.
"We had all expected the consumer hit wouldn't be as serious as the media hit Toyota was taking," said Wes Brown, an analyst with market-research firm Iceology in Los Angeles.
"Now, things may start to shift that image hit to the consumer side that had been steadfastly loyal. It is really starting to run the risk of escalating things tremendously."
The car maker has also begun an investigation of its Prius model in Japan, which could undermine sales in Toyota's home market, where it so far hasn't recalled any vehicles due to the sudden-acceleration problem.
The Prius was Japan's best-selling vehicle in 2009.
"The Prius is Toyota's flagship model, its key to the future," said Ashvin Chotai of Intelligence Automotive Asia, a consulting company.
"If that model gets tainted, then that would suggest Toyota's crisis has moved on to the next level."
In the US, the National Highway Traffic Safety Administration is examining the electronics of car makers, including Toyota, in response to complaints.
Among the issues being looked at is whether electromagnetic interference from power lines could affect the computerised systems that help run today's vehicles.
At least 15 lawsuits seeking class-action status have been filed against Toyota on the acceleration issue. Seven of these claim an electronic throttle system called ETCS-i is at fault, rather than the pedals. (Bloomberg)