Tuesday, July 6, 2010

Toyota admits it 'knew about Lexus engine problem two years ago' as it begins global recall

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A Lexus GS450h at a showroom in Tokyo, which is one of seven Toyota Lexus models to be recalled in Japan

Toyota knew about the Lexus engine problem two years ago, even changing the spring part to correct it, but did not think a recall was warranted until recently.

The world's largest car maker started a global recall over engine defects in its Lexus and Crown models yesterday.

Almost 92,000 vehicles have begun to be recalled in Japan, but Toyota expects to recall 270,000 cars worldwide to fix an engine problem that causes the cars to stall.
The total includes 138,000 vehicles in the U.S., 15,000 in Europe, 10,000 in the Middle East, 6,000 in China, 4,000 in Canada, and 8,000 in other regions.



'We apologise for inconveniencing our customers. We hope to fix the problem soon,' Toyota spokesman Paul Nolasco said.

Toyota has received about 200 complaints, but no accidents due to the fault have been reported.

The Japanese car manufacturer will recall seven models from the luxury Lexus range together with its Crown model vehicles, produced between July 2005 and August 2008.

Vehicles from the 2009 and 2010 model years are not affected.

The recall, costing an estimated £150million comes on the back of a series of safety problems to blight Toyota over the past 18 months.

More than 8.5 million vehicles already have been recalled since last autumn for various problems, including sticking accelerator pedals, braking software glitches and defective floor mats.

Last September the car giant announced its biggest recall in its history after fears the accelerator pedals could become trapped in floormats. Almost 4 million cars in the U.S. were affected.

Five months later around 2.3 million cars in the U.S. were recalled over potentially faulty accelerator pedals.

In April this year, Toyota was fined a record £11million in the U.S. for responding too slowly when the recall crisis erupted.

U.S. transport secretary Ray LaHood said that 'by failing to report known safety problems as it is required to do under the law, Toyota put consumers at risk'.

The latest woes come on top of a recall last week for 17,000 Lexus hybrids after testing showed fuel could spill during a rear-end crash.

Analysts say the latest recalls do little to instil consumer confidence after Toyota president Akio Toyoda apologised to shareholders last month and vowed to improve vehicle quality inspections.

'It is not doing a good job in communicating a message about what exactly it is doing to beef up quality checks,' said Shotaro Noguchi, auto analyst with Nomura Securities in Tokyo.

'So it is hard for people to believe Toyota is taking the customer's view as it is promising to do.'

Toyota faces more than 200 lawsuits in the U.S. tied to accidents involving defective vehicles, lower resale values, and a drop in its stock value.

The company's overall sales have been damaged this year following its safety-related recalls. Toyota has been trying to boost U.S. sales with deep promotions, including 0% financing and free servicing.







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