Bloomberg News

Toyota Recalls Persist as Most Prius Hybrids Need Fix

February 12, 2014

Toyota Recalls Majority of Prius Cars

The recall involves about 1.9 million vehicles produced globally since March 2009, spokesman Brian Lyons said. As of last year, worldwide deliveries of the Prius line of vehicles exceeded 3.6 million units since its release in 1997, accordingto the Toyota City, Japan-based company. Photographer: Kiyoshi Ota/Bloomberg

Toyota Motor Corp. (7203)’s Akio Toyoda, beset by recalls since taking over as president in 2009, is now finding more flaws in one of his most high-profile models and adding to a growing fleet of cars that need fixing.

Toyota said yesterday that it’s recalling about 1.9 million Prius hybrids worldwide, or more than half of those sold since the model’s debut 17 years ago. The company is asking its dealers to upgrade the software, which could cause the cars to lose power or shut down and stop.

While the grandson of Toyota’s founder has steered Toyota back to prosperity -- the company is forecasting record profit this fiscal year -- weeding out defects is among the targets that still elude him. To focus on quality, Toyoda is holding back on building car plants until at least 2015 to avoid the type of over-expansion that he blamed for spurring more than 10 million recalls in 2009 and 2010.

“It’s too early to tell whether this raises serious question marks over Akio Toyoda’s revamp of Toyota, or whether the bad, old ways are still there,” Ashvin Chotai, managing director of Intelligence Automotive Asia, said by telephone. “This takes the spotlight away from a lot of the good things that have been going on at the company.”

The flaw within the Prius hybrid system software may cause some parts to overheat in driving situations such as accelerating from a stop, Toyota said yesterday in an e-mail. This can lead to the car entering a “failsafe mode,” where it can still be driven at reduced power, or in limited cases, shut down the hybrid system and stop the vehicle.

Toyota hasn’t received any reports of accidents or injuries related to the software problem, according to the statement.

Hybrid Leader

Toyota has been the auto industry’s hybrid leader, having built three generations of the main Prius model and adding derivatives such as the Alpha wagon, sold as the v in the U.S. market, since 2011. The recall announced yesterday involves all of the main Prius models built in the third generation, spokesman Brian Lyons said.

As of last year, worldwide deliveries of the Prius line of vehicles exceeded 3.6 million units since Toyota first released the hybrid in 1997, according to the Toyota City, Japan-based company.

Toyota called back more vehicles than any automaker in the U.S. in each of the last two years, according to the National Highway Traffic Safety Administration. The Prius recall involves almost 1 million vehicles in Japan and about 700,000 cars in the U.S. market, Lyons said.

Learned Lesson

Investors weren’t spooked by the recall, announced an hour before the market close in Japan, as the stock ended at 6,020 yen in Tokyo trading, up 0.4 percent.

“My impression is Toyota is recalling more often, even with very minor flaws” with its vehicles, said Yuuki Sakurai, the Tokyo-based president of Fukoku Capital Management Inc. “Toyota learned its lesson from the big recalls in 2009 and 2010.”

Aside from the Prius, Toyota also said yesterday that it will recall about 260,000 other vehicles in the U.S. That campaign involves a separate issue with the 2012 and 2013 model years of the Toyota Tacoma pickup and Lexus RX 350 sport utility vehicle, and the 2012 Toyota RAV4 SUV.

A software issue with those models can cause their stability, anti-lock braking and traction controls to intermittently turn off, though the standard braking operation in those vehicles would remain fully functional, according to a statement posted on Toyota’s U.S. website.

Sales Forecast

The recalls follow Toyota forecasting this month that profit for the year ending March will surge to a record 1.9 trillion yen ($18.5 billion), driven by the weaker yen, which boosts the value of cars exported out of Japan.

The company has set a target of selling an unprecedented 10.32 million vehicles in 2014 after leading General Motors Co. and Volkswagen AG in global deliveries for a second straight year in 2013.

Worldwide sales for Toyota, including by subsidiaries Hino Motors Ltd. and Daihatsu Motor Co., rose 2.4 percent to 9.98 million units last year. Volkswagen and its MAN SE and Scania AB (SCVB) heavy-truck units followed with 9.73 million sales, the Wolfsburg, Germany-based carmaker said last month. GM was third in the industry with 9.71 million.

To contact the reporters on this story: Craig Trudell in Tokyo at ctrudell1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus