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Toyota to Recall 1.53 Million Cars for Fluid Leak

Toyota Motor Corp.’s recall of 1.53 million autos worldwide for a flaw linked to brake-fluid leaks boosts the company’s tally of U.S. vehicles requiring repairs to more than 5 million this year. Honda Motor Co. plans to fix almost a half-million vehicles for the same defect.

Toyota said yesterday it will repair about 740,000 vehicles in the U.S. and 599,000 in Japan with rubber seals at risk of allowing leaks. U.S. models affected include certain Avalon sedans, Highlander sport-utility vehicles and Lexus GS 300, IS 250 and IS 350 luxury cars for model years 2004 through 2006. The Toyota City, Japan-based company has announced recalls covering 5.4 million U.S. autos this year.

“They seem to know they must be very open about this to restore customer confidence,” said Ian Fletcher, an analyst at IHS Automotive in London. “They can’t afford anymore to have the massive political trial they had in the U.S.”

Toyota, the world’s biggest carmaker, is seeking to regain market share and customers’ trust after recalling more than 10 million autos globally in the past year, including about 8 million for defects linked to unintended acceleration. To catch defects earlier, Toyota has slowed its vehicle-development process, added engineers in the U.S. and Japan and assigned teams to scrutinize parts designs and suppliers’ operations.

Honda, Japan’s second-largest automaker, told regulators in Japan this week it would recall about 4,000 Legend sedans in that market for the same brake-fluid glitch.

‘Hundreds of Thousands’

In the U.S., Honda will recall 471,820 Odyssey minivans and Acura RL luxury sedans from model years 2005 through 2007 to fix the brake defect, according to a letter the Tokyo-based company sent to the U.S. National Highway Traffic Safety Administration yesterday.

Honda has received no reports of accidents or injuries in the U.S. related to a brake-fluid leak, said Christina Ra, a spokeswoman for the company’s U.S. unit in Torrance, California.

Toyota’s American depositary receipts, each equal to two ordinary shares, rose 20 cents to $71.82 at 10:45 a.m. in New York Stock Exchange composite trading. Honda’s ADRs, each equal to one ordinary share, fell 14 cents to $36.16.

Toyota found the brake-fluid flaw on its own, said David Strickland, administrator of the National Highway Traffic Safety Administration.

“Toyota’s action was uninfluenced by NHTSA,” Strickland told reporters yesterday in Herndon, Virginia. “They notified the agency as soon as they knew, which is fantastic, and they took affirmative action, which is the right thing to do.”

Braking Performance

In some cases, a small amount of brake fluid can leak from the master cylinder and cause braking performance to gradually decline.

“It can cause a ‘spongy’ feeling in the brakes,” said Brian Lyons, a Toyota spokesman.

The problem occurs when the wrong type of brake fluid is used, Lyons said. Toyota is aware of 14 incidents in the U.S. of fluid leaking because of the flaw and none resulted in an accident or injury, he said.

The recall also affects European markets led by the U.K., Russia and Germany, said Etienne Plas, a Brussels-based spokesman for Toyota. In the U.K., Toyota is recalling 15,408 vehicles affected by the cylinder problem, he said by telephone. Toyota also is recalling models built at joint ventures in China, the country’s General Administration of Quality Supervision, Inspection and Quarantine agency, said on its website.

To contact the reporters on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net; Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net

To contact the editor responsible for this story: Kae Inoue in Tokyo at kinoue@bloomberg.net.

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