Jan. 25 (Bloomberg) -- Toyota Motor Corp.'s gold-standard reputation for quality has been a vital ingredient in powering sales.

But as Toyota expands and overtakes its main U.S. competitors, its cherished status is losing a bit of luster.

On Jan. 19, Toyota recalled a half-million pickup trucks and sport-utility vehicles in the U.S. to correct a possible flaw in the suspension that might make the vehicles hard to steer.

The recall was similar to another by Toyota in 2005 covering the same defect in about 800,000 Tundra pickups and Sequoia SUVS.

This time, the automaker said it knew of 11 accidents ``that might be related,'' to the defect, including six injuries, said Bill Kwong, a Toyota spokesman.

Has the most-admired, most-copied, most-studied and most- envied automaker of the past 20 years suddenly and disastrously lost its way? Most quality experts say no. Toyota has had recalls before, as have all automakers. In fact, the number of vehicles the company recalled in 2006 plunged from the year earlier.

Though Toyota's quality ratings have slipped from their once-lofty heights, they remain at or near the top of most scales of measurement. In the closely watched J.D. Power & Associates initial quality study for 2006, Toyota was rated No. 2, after Hyundai, for non-luxury brands. Among luxury brands, Toyota's Lexus was second, behind Porsche.

Still Most Reliable

In November, Toyota dominated the annual survey of most- reliable vehicles by Consumer Reports magazine, accounting for 21 of 47 autos with the highest rating.

Still, Toyota, on a trajectory to pass General Motors Corp. as the No. 1 automaker worldwide, is in danger of losing its halo. On a comparative basis, its one-time wide lead over GM and other rivals in terms of perceived quality is shrinking, a gap that only a few years ago made buying a Toyota one of the no- brainers in automotive retailing.

Toyota executives reject suggestions that they are expanding too fast, taking shortcuts on fundamental practices that have contributed to the popularity of its cars.

Of course, the company's own high quality forced rivals to build better cars and trucks. And Toyota's buyers may have higher expectations and be more discerning than others.

With demand rising, Toyota has raced to enter new niches, such as full-size pickups, where the company has little experience.

Too Stretched?

``They've had to spread themselves thin to get into all these markets and market segments,'' said Art Spinella, an analyst for CNW Market Research in Bandon, Oregon. ``It takes a long time for public perception to change to negative once you start having problems.''

On a scale of one to 10, consumers intending to buy a car rate Toyota ``a high 8'' in a CNW survey, Spinella said, down from 9.2 in 2003. GM brands, except for Saturn, have been rising, with Cadillac at nine, he said. The reasons for the turnaround, he said: word of mouth, press reports of recalls, and personal comparisons.

Toyota has been building new factories at a brisk rate in North America to meet demand for its vehicles and inoculate itself against political opponents who would blame its imports for damaging U.S. manufacturing and destroying the jobs of American workers.

This rapid expansion has necessitated reliance on more and more American engineers and managers -- rather than company veterans from Japan -- to teach the Toyota production system to recruits. One might guess that Toyota's manufacturing culture and core tenets may be diluted in the U.S., at least a little.

Home-Grown Quality

In the 1980s, each Toyota plants in the U.S. reported to a so-called mother plant in Japan, which mentored them and assisted with problems. Today, the older U.S. Toyota plants oversee the newer ones.

``Toyota's largest overseas market (the U.S.) eventually has to take responsibility'' for building high-quality vehicles without micromanagement, said Jeff Liker, a University of Michigan professor who specializes in studying Toyota.

In early January, Toyota officials said they are studying sites for an eighth North American assembly plant. A 13 percent increase in U.S. sales in 2006 was fueled in part by a record 1.18 million vehicles imported to the U.S. from Japan.

Toyota executives know they must pay heed to the political winds in Washington. A resurgent Democratic Congress might push for trade restrictions with Japan or tinker with labor law to make union organization easier in non-union plants such as Toyota's.

Any attempt at restrictive legislation meant to help domestic U.S. automakers and slow Toyota can be countered. It will be foiled more effectively if Toyota's customers, workers and dealers can still claim the industry's best quality.

To contact the writer of this column: Doron Levin in Southfield, Michigan at dlevin5@bloomberg.net

Last Updated: January 25, 2007 00:12 EST