Toyota admits blow to sales, defends response to gas pedal recall+

NAGOYA, Feb. 2 Kyodo -
An executive of Toyota Motor Corp. admitted Tuesday its sales are beginning to
be hit hard by the massive global recall over faulty accelerator pedals but
emphasized the automaker has done everything it can to quickly find a remedy
for its customers.

Shinichi Sasaki, Toyota's executive vice president in charge of quality and
customer service operations, offered an apology to customers, appearing before
the media for the first time in Japan to explain the recalls, which have eroded
its long reputation for safety.
The Japanese auto giant had been mostly silent about the financial impact of
the extensive recall. But Sasaki admitted Toyota is ''very concerned'' about
meeting its recently announced global sales target for 2010, which projects a
year-on-year growth of 6 percent to 8.27 million units.
He revealed that vehicle orders have been declining since the announcement of
the gas pedal recalls and said previous recalls have shown sales in the
affected markets slipping around 20 percent in the first month.
''I'm afraid there will be a bigger impact,'' Sasaki said, citing the
unprecedented scale of the recalls. ''We will monitor further and later
disclose the anticipated influence on sales.''
Toyota first recalled about 2.3 million vehicles, including its popular Corolla
and Camry models, in the United States on Jan. 21, to repair gas pedals that
can get stuck in a partially depressed position or return slowly when released.
The U.S. figure has since then been revised to 2.21 million vehicles.
The recall has rapidly spread to Canada, Europe and China with the automaker
saying the number could ultimately reach 4.45 million vehicles worldwide. The
latest figure includes about 180,000 units in Latin America, Africa and the
Middle East where Toyota is mulling implementing a recall or voluntary repairs.
On Monday, Toyota announced a remedy for the faulty accelerator pedals and said
it will begin repairing the recalled vehicles in the United States, Canada and
Europe by inserting a steel reinforcement bar. It will also resume suspended
production of the eight recalled models in five plants in North America next
Monday.
''We put priority on notifying our customers as quickly as possible even if
this resulted in confusion among our dealers and the frontline of our
production,'' he said. ''As a result, there was a time lag in the announcements
of the remedy measures and the recall.''
Sasaki said he gave no consideration to the impact on earnings or costs when
compiling the remedy and was instructed by Toyota President Akio Toyoda to put
customers first.
More details of the impact on Toyota's business may be revealed when the
company announces its earnings for the April-December period on Thursday.
In explaining the gas pedal problem, Sasaki revealed that the company became
aware of it after receiving consumer complaints about its Tundra pickup trucks
in 2007, which are subject to the current recall.
But Toyota did not immediately carry out a recall since the problem was thought
to be dealt with by replacing the parts material. It was ultimately prodded by
U.S. regulators to make a swift decision on implementing the recalls from late
last year.
Sasaki also denied that the automaker's electronic throttle system was behind
the trouble, which is believed to be at the center of reported class-action
lawsuits by owners of Toyota vehicles in the United States and Canada.
He repeated the recalls will not affect vehicles in Japan since the pedal parts
are produced by Denso Corp. while the parts of the recalled vehicles are made
by U.S. supplier CTS Corp.
The automaker is carrying out a separate recall of some 5.55 million vehicles
in the United States and Canada to reduce the risk of gas pedals getting stuck
under loose floor mats and causing sudden acceleration. But Sasaki reiterated
the two problems are ''unrelated.''
The automaker, which had been reticent about discussing the recall issue
openly, is launching an aggressive campaign to repair its damaged reputation
with newspaper ads, appearances on television, and press conferences by company
executives, excluding Toyoda.
After the company announced a remedy for the gas pedals, Toyota's shares jumped
about 4 percent Tuesday in Tokyo. The automaker had lost about 18 percent in
the past seven sessions.
==Kyodo
2010-02-02 23:00:43


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