dan9999
02-05-2010, 01:07 PM
Toyota: Apology but no new recall
Chris Isidore
February 5, 2010: 7:59 AM ET
NEW YORK (CNNMoney.com) -- Toyota Motor chief executive Akio Toyoda apologized Friday for the company's recall and quality problems, but did not announce another recall of its popular Prius Hybrid beset by brake problems.
Toyoda, the grandson of the company's founder, made his first public appearance in the two weeks that the company has faced a growing crisis over the safety and quality of its vehicles.
The company's problems have affected 8.1 million vehicles worldwide and cost the company an estimated $2 billion in repair costs and lost sales due to problems with a sticking accelerator.
"Believe me, Toyota's cars are safe," according to the Kyodo news agency.
He also said the company would set up a committee to examine problems that led to the recall and said the company would cooperate with U.S. authorities who are looking into problems with Toyota vehicles, the news agency reported.
But there was no announcement about what would be done with the model year 2010 Prius, which the company has admitted had a problem with the software controlling its anti-lock braking system. The company said earlier this week that it has changed the software for cars produced since January, and it is looking into what to do with the vehicles already on the road.
The 2010 model year Prius went on sale in the middle of last year. There are an estimated 37,000 of the cars on the road in the United States, and more than 200,000 worldwide. The model is the best-selling vehicle in Japan and Toyota's fourth-best selling model in the U.S. market.
There have been 124 reports of problems with the brakes on the Prius in the United States, according to the National Highway Transportation Safety Administration, which Thursday announced it had launched a formal defect investigation into the car. There have been reports of four accidents involving the Prius brakes, two of which had injuries, although there have been no reported fatalities.
The automaker, which achieved steady market share growth in the United States and elsewhere with its reputation of strong vehicle quality and safety, has been criticized by some safety officials, including U.S. Transportation Secretary Ray LaHood, for being slow to respond to these latest problems. LaHood said Toyota did not move on the accelerator recall until pushed to do so by U.S. safety officials.
The Prius brake problem causes a delay of about a second in the brakes engaging, but during a second a car traveling 60 m.p.h. can travel almost 100 feet.
Some industry experts say there is a risk that the impact on Toyota sales from these problems could be long-lasting due to changed consumer perception of its brands.
While Toyota (TM) has far greater financial resources than most of its rivals, especially its U.S. rivals General Motors, Ford Motor (F, Fortune 500) and Chrysler Group, the quality issues do pose a financial challenge for the company. Friday credit rating agency Standard & Poor's placed its debt on credit watch, meaning it faces the risk of a downgrade that could raises its borrowing costs.
"Standard & Poor's believes that these developments may affect the company's reputation for quality, weakening its competitive position," it said in the announcement. "The ratings may be lowered if the likelihood increases that Toyota's brand image will be weakened by the ongoing series of events"
-A CNN Wire report was used in this article
Chris Isidore
February 5, 2010: 7:59 AM ET
NEW YORK (CNNMoney.com) -- Toyota Motor chief executive Akio Toyoda apologized Friday for the company's recall and quality problems, but did not announce another recall of its popular Prius Hybrid beset by brake problems.
Toyoda, the grandson of the company's founder, made his first public appearance in the two weeks that the company has faced a growing crisis over the safety and quality of its vehicles.
The company's problems have affected 8.1 million vehicles worldwide and cost the company an estimated $2 billion in repair costs and lost sales due to problems with a sticking accelerator.
"Believe me, Toyota's cars are safe," according to the Kyodo news agency.
He also said the company would set up a committee to examine problems that led to the recall and said the company would cooperate with U.S. authorities who are looking into problems with Toyota vehicles, the news agency reported.
But there was no announcement about what would be done with the model year 2010 Prius, which the company has admitted had a problem with the software controlling its anti-lock braking system. The company said earlier this week that it has changed the software for cars produced since January, and it is looking into what to do with the vehicles already on the road.
The 2010 model year Prius went on sale in the middle of last year. There are an estimated 37,000 of the cars on the road in the United States, and more than 200,000 worldwide. The model is the best-selling vehicle in Japan and Toyota's fourth-best selling model in the U.S. market.
There have been 124 reports of problems with the brakes on the Prius in the United States, according to the National Highway Transportation Safety Administration, which Thursday announced it had launched a formal defect investigation into the car. There have been reports of four accidents involving the Prius brakes, two of which had injuries, although there have been no reported fatalities.
The automaker, which achieved steady market share growth in the United States and elsewhere with its reputation of strong vehicle quality and safety, has been criticized by some safety officials, including U.S. Transportation Secretary Ray LaHood, for being slow to respond to these latest problems. LaHood said Toyota did not move on the accelerator recall until pushed to do so by U.S. safety officials.
The Prius brake problem causes a delay of about a second in the brakes engaging, but during a second a car traveling 60 m.p.h. can travel almost 100 feet.
Some industry experts say there is a risk that the impact on Toyota sales from these problems could be long-lasting due to changed consumer perception of its brands.
While Toyota (TM) has far greater financial resources than most of its rivals, especially its U.S. rivals General Motors, Ford Motor (F, Fortune 500) and Chrysler Group, the quality issues do pose a financial challenge for the company. Friday credit rating agency Standard & Poor's placed its debt on credit watch, meaning it faces the risk of a downgrade that could raises its borrowing costs.
"Standard & Poor's believes that these developments may affect the company's reputation for quality, weakening its competitive position," it said in the announcement. "The ratings may be lowered if the likelihood increases that Toyota's brand image will be weakened by the ongoing series of events"
-A CNN Wire report was used in this article