Toyota Rises as U.S. Finishes Investigation After 10 Million Auto Recalls
Toyota Motor Corp., the world’s biggest carmaker, rose the most in almost two weeks in Tokyo trading after U.S. regulators concluded a yearlong investigation that spurred the largest recalls in the company’s history.
The National Highway Traffic Safety Administration ended a probe into unintended acceleration after asking Toyota to recall an additional 2.17 million vehicles, NHTSA Administrator David Strickland said in an e-mailed statement yesterday.
President Akio Toyoda’s first full year on the job was consumed by a series of recalls that totaled more than 10 million vehicles ranging from luxury Lexus SUVs to Prius hybrids. Toyoda, 54, was called to testify before the U.S. Congress on the automaker’s safety record, and the company’s sales slumped.
“NHSTA closing the investigation is the ‘go-ahead’ sign for Toyota in the U.S. as it doesn’t have to worry about further allegations from the government,” said Fukoku Capital Management Inc. President Yuuki Sakurai, who manages about 180 billion yen ($2.2 billion) in Tokyo, including Toyota shares. “Still, they have to face the reality of having lost share, and it won’t be easy to get it back.”
Toyota called back millions of U.S. vehicles in 2009 and 2010, mostly for defects related to unintended acceleration. The carmaker also paid a record $48.8 million in fines for how some of the recalls were conducted. The recalls caused the Toyota City, Japan-based company to briefly halt sales of some models in 2010 and contributed to its 0.4 percent U.S. sales decrease last year, the only such decline among large automakers.
Shares of the automaker gained 2.2 percent, the most since Feb. 14, to 3,755 yen at the 3 p.m. close in Tokyo trading. The benchmark Nikkei 225 Stock Average gained 0.7 percent.
“The market looked favorably on NHTSA announcing that their investigation into Toyota is closed,” said Toshihiko Matsuno, an analyst at SMBC Friend Securities Co.’s investment advisory department.
Toyota’s latest recall, its biggest in a year, includes 1.38 million vehicles being added to the company’s November 2009 announcement to fix floor mats that could shift out of position, the company said yesterday in a statement. The move came exactly a year after Toyoda testified before U.S. lawmakers about record recalls associated with unintended acceleration.
“As a result of the agency’s review, NHTSA asked Toyota to recall these additional vehicles, and now that the company has done so, our investigation is closed,” Strickland said.
The end of the investigation follows a report by U.S. safety regulators and NASA, the U.S. space agency, that said they were unable to find any electronic cause for unintended acceleration in Toyotas. Last year’s recalls were for floor mat- related entrapment of accelerator pedals and for pedals supplied by CTS Corp. that could stick.
The vehicles in the expanded U.S. recall include 603,000 model 2003 through 2009 4Runner sport-utility vehicles, 761,000 model 2006 through 2010 RAV4 SUVs and 17,000 model 2008 through 2011 Lexus LX SUVs.
Toyota is also recalling 769,000 model 2004 through early 2007 models of the Highlander and Highlander Hybrid, and 2004 through 2006 Lexus RX330, RX350 and RX400h SUVs to replace driver’s side floor-carpet covers and retention clips. About 20,000 model 2006 through early 2007 Lexus GS sedans are being recalled to adjust the shape of the plastic pad in the driver’s side carpet. In each case, carpets could shift and potentially interfere with the accelerator.
“It just echoes a bit of sloppy designs, a lack of attention to detail,” said Rebecca Lindland, an analyst at IHS Automotive in Lexington, Massachusetts. “That’s really not something we would have ever associated with Toyota a year ago.”
In Canada, an additional 147,300 vehicles are being recalled, said Sandy Di Felice, a spokeswoman for Toyota Canada.
In Europe, the company is recalling 37,174 Lexus RX cars manufactured between 2003 and 2006, Etienne Plas, a Toyota Europe spokesman, said by telephone, adding that the company hasn’t received any complaints there. The plastic floor-carpet cover may obstruct pedals if its fastening clips are inserted incorrectly, he said.
Toyota didn’t include vehicles sold in Japan or China, as models sold there were unaffected by the flaws, the company said.
Separately, NHTSA opened an investigation last week of Highlander Hybrids after receiving 32 customer complaints about 2006 model year vehicles being prone to stalling. The company hasn’t yet received NHTSA’s request for information on that matter, Lyons said.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.