The FINANCIAL — Toyota is to recall its flagship 2010 model Prius hybrid in Japan and the US this week to repair a problem with the vehicle’s braking system, according to reports.
The firm did not comment on the reports, but said it would be announcing soon what action it would take over problems with the Prius, according to BBC. Toyota has already recalled about eight-million vehicles with faulty accelerator pedals or floor mats.
The brake problem is thought to affect about 270,000 Priuses that were sold in the US and Japan starting last May, the same source reports. Toyota blames a software glitch and says it has already fixed vehicles sold this year.
A U.S. Department of Transportation official said Sunday the agency hadn't received confirmation of any recall or proposed remedy on the Prius. The National Highway Traffic Safety Administration "is working quickly to detect any potential problems, but as of now, Toyota has not said there is a safety defect with the vehicle," said the DOT official, according to The Wall Street Journal. "If Toyota does have knowledge of a safety defect, they are legally required to stop sale of the affected vehicles. They are also legally obligated to notify NHTSA within five days of discovering that a defect exists."
The Prius fix is unrelated to the sudden-acceleration problems that have badly tarnished the company's image over the past few weeks, prompting a global recall of 8.1 million vehicles, at a potential cost of up to $2 billion, due to gas pedal and floor mat problems, the same source reports. By comparison, the Prius fix affects a relatively small number of vehicles—the company has sold 311,000 units of the affected third-generation versions of the hybrid—and hasn't had the kind of serious safety complaints that have hit other models.
The Prius, which has become an icon of green design, was Japan's best-selling car last year, according to Mail Online. The braking problem – blamed on a computer software glitch – is equally likely to affect Prius owners in the UK, as all the cars sold worldwide are made in Japan and China. Some 5,000 have been sold here since August.
There have been 180 complaints about brake problems with the Prius in the U.S. and Japan, and the defect has been linked to at least five crashes, the same source reports. Toyota's president has issued a grovelling apology as continuing saftey fears have seen £19billion wiped off the company's share price. Akio Toyoda, the grandson of Toyota's founder, said: 'I would like to take this opportunity to apologize from the bottom of my heart for causing many of our customers concern after the recalls across several models in several regions.'
A Prius recall may further tarnish Toyota’s reputation after the Toyota City, Japan-based company lost about $33 billion in market value amid expanding global recalls of other models to repair defects linked to unintended acceleration, according to Business Week. Those recalls have yet to include any vehicles in Japan, where the Prius was last year’s top-selling model.
“It’s really shocking,” said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, the same source reports. “The damage to Toyota will be big.”
Toyota estimates its losses will reach $2bn (£1.23bn) in costs and lost sales from its worldwide recall of vehicles that might have faulty accelerator pedals, but a recall of Prius models would send this figure even higher, according to BBC. But these losses could escalate if the trust and reputation the company built up over a period of decades is demolished, observers say.
Toyota also plans to recall Lexus HS250h and Sai hybrid models in Japan this month, one of the people said, Business Week reports. The company is considering steps dealers can take for current Prius owners, including exchanging some parts, the person said. Toyota fell 1.1 percent to close at 3,280 yen in Tokyo trading today. The stock has declined 22 percent since Jan. 21, when the carmaker began recalling vehicles to fix gas pedals linked to unintended acceleration.
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