eirmoney | Toyota Ready To Address The Concerns Of Recall

Toyota Ready To Address The Concerns Of Recall

Posted by Anil Bagra | 07 February 2010

Toyota Motor Corporation recalls 4.5 million cars globally.

The company’s executive in charge of US Sales Division, Jin Lentz will make a public appearance to put to rest to all the worries of the consumers over recall due to sudden acceleration of the vehicles made by Toyota Motor. This will be the first ever media appearance by the company to address this matter. The company also published an advertisement in newspapers in order to inform about the halt on production for a week at the company’s five manufacturing plants in North America.

The regulators have approved a shim to be inserted in the gas pedals of the vehicles to prevent the sudden acceleration. Toyota plans to produce about 120,000 shims in a day. The discontinuation of production in North America will help assemblies in installing of new gas pedal. The eight models that have been suspended are the Corolla, Matrix, RAV4, Sequoia, Highlander, Camry, Avalon, Tundra and Subaru. Among the suspended models, the Toyota Corolla and the Camry garner the maximum sales in the US.

In November last year, Toyota had announced measures to trim the gas pedals to resolve the pedal entrapment issue. The US congressional panel tried to find out the reasons behind complaints received by National Highway Traffic Safety Administration (NHTSA) about runaway Toyotas before the company took action. This is another product recall for Toyota in recent times. In late 2009, the automaker recalled as many as 4.3 million vehicles due to issues with floor mats jamming the accelerator pedal.

A couple of years ago, Toyota had begun challenging General Motors as the world’s top automaker with the kind of reliability and quality the company was delivering in the vehicles. The investors are apprehensive about the blow the company has received in terms of sales. Toyota has suffered a loss of US$22 billion due to the sudden decline in sales.

Last week, the company’s shares traded at ¥3,430 at a decline of 1.7 percent. The company’s shares were doing better than the other Japanese automakers namely, Honda Motor and Nissan Motor.

Analysts believe that the company needs to resolve all the issues permanently to get back the customer and investor confidence. The US market accounts for about 25 percent of Toyota’s sales. The vehicle recall is a huge threat for the automaker’s reputation in terms of quality and reliability in the market.