The famed Japanese automaker Toyota Motor Corp is clearly facing a bumpy road ahead. Even as it reels from allegations of faulty gas pedals, recall of its Prius hybrid model from the roads, government probes, there is a call to widen the probe to include its electronic systems.
The Prius hybrid model is being recalled from the road because of alleged sudden acceleration, sometimes causing a loss of control. The world’s biggest car maker has said it is caused by out-of-position floor mats and sticky accelerator pedals.
The US road safety regulator, NHTSA, is already looking at both electronic throttle control systems and the possible effects of electromagnetic interference on them. The National Highway Transport Safety Agency, however, has clarified that it is not suspecting any safety defects at this point of time.
US Transportation Secretary Ray LaHood added to Toyota’s woes when he said at a congressional hearing that owners of recalled Toyota and Lexus cars should stop driving them. There is an estimated six million such cars in the US.
By the time Mr LaHood retracted his “misstatement”, the damage had been done. His subsequent clarification that he only meant to encourage Toyota owners to get their vehicles fixed immediately did little to calm nervous vehicle owners.
The latest position is that the cars indeed need repairs but the owners don’t have to drop everything and rush to the workshop. They can wait for their turn but they need to exercise caution while driving.
Toyota has said it is recalling about 2.57 million vehicles in the US and Canada.
Panicked Toyota vehicle owners flooded dealerships with calls and repair demands. Dealers are starting to receive kits the company says will address the problem, allowing them to make the first repairs.
Toyota has said it will compensate dealers for the “faulty” cars and to ensure they provide excellent customer service to car owners. The compensation amounts could range from $7,500 to $75,000, depending on how many cars a dealership sold last year, a source said.
Toyota said the acceleration problem “is rare and generally does not occur suddenly. In the rare instances where it does it occur, the vehicle can be controlled with firm and steady application of the brakes.”
The company’s troubles affected its shares too in most markets. Its US depositary receipts, each representing two ordinary shares, fell 8 percent to a 10-month intra-day low of $71.90 in New York Stock Exchange composite trading but climbed to close at $73.49 Wednesday.
On Thursday, Toyota shares dropped more than 4% in early trading in Tokyo.