Sales of 'safety risk' Lexus SUV halted in US
Toyota asked Lexus dealers in North America to halt sales of GX 460 sport-utility vehicles (SUV) after Consumer Reports labelled the model a "safety risk," the magazine's first such designation in nine years.
"We are taking the situation with the GX 460 very seriously and are determined to identify and correct the issue Consumer Reports identified," Mark Templin, US general manager for the luxury brand said.
Lexus in Ireland said last night that the GX 460 was not on sale here and was not part of the Lexus model range in western Europe.
The 2010 GX 460 received the designation and a "don't buy" recommendation because emergency driving tests indicated it may be prone to rollover accidents, Consumer Reports said yesterday.
The non-profit magazine, published by Yonkers, New York-based Consumers Union, said that it hadn't deemed any other vehicle a safety risk since 2001.
The rating complicates Toyota's efforts to repair its image after recalling more than eight million vehicles worldwide for defects linked to unintended acceleration and brakes, actions that led to US congressional hearings and a rebuke by transportation secretary Ray LaHood.
The US assessed a $16.4m penalty against Toyota for delaying a recall of sticky accelerator pedals and said there may be more fines.
James Bell, an executive market analyst for Kelley Blue Book explained the impact of the move, noting: "Consumer Reports is a large and noteworthy publication with legions of fans.
"We can expect that the 'headline' effect will take another round's toll, much to Toyota's chagrin," he added.
"The magazine's report "may 'scratch the scab' before healing was complete," according to Mr Bell.
Toyota was unchanged at 3,705 yen in Tokyo trading, compared with a 0.3pc gain in the Nikkei 225 Stock Average.
Toyota has sold 5,400 units of the model in North America since it was introduced in November. The company has also sold 620 in the Middle East, Russia, and the Oceania region.
Toyota hasn't decided its response in those regions, Takeuchi said.
Toyota's US sales rose 41pc in March after two months of declines, as the automaker offered incentives such as no-interest loans and discount leases.
The March gains included a 42pc increase for Lexus. GX sales tripled last month to 1,785 and rose almost threefold to 4,787 in the first quarter.
The GX has a starting price of about $52,000, according to Lexus's Web site.
The model accounted for 10pc of Lexus brand sales in the first three months of 2010, according to Edmunds.com.