Toyota's safety recall goes global

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Toyota's coveted safety record took a major new hit Thursday as a massive recall caused by an accelerator problem grew in the United States and spread to Europe and China for the first time.

Toyota raced past US giant General Motors in 2008 to become the world's top-selling automaker, but it has been bedevilled by a series of safety issues that have raised questions about whether its quality control has suffered.

Toyota shares tumbled 3.91 percent to 3,560 yen Thursday, after a drop of 4.26 percent the previous day in response to the group's decision to suspend sales in United States of eight models due to the safety concerns.

The Japanese giant announced a new recall of almost 1.1 million more vehicles in the United States to replace floor mats that could trap accelerator pedals.

The company said five models had been added to the recall: the 2008-2010 Highlander, the 2009-2010 Corolla, the 2009-2010 Venza, the 2009-2010 Matrix and the 2009-2010 Pontiac Vibe.

The total number of cars and trucks affected by that action now stands at almost 5.3 million - equivalent to more than two-thirds of Toyota's worldwide sales last year of 7.81 million vehicles.

Alongside the floor mat trouble, Toyota last week recalled 2.3 million US cars and trucks because of problems with sticking accelerator pedals.

The company said that in rare cases, the pedal mechanism could become worn and harder to depress, or get stuck in a partially depressed position.

Toyota said it now plans to extend that recall to Europe, although it has not yet decided which models and how many vehicles will be affected there.

And the same accelerator defect is prompting Toyota to recall just over 75,000 RAV4 sport utility vehicles in China, made in 2009-2010, the Chinese government's product safety watchdog said.

China's auto sales surged past those in the United States in 2009 to make it the world's biggest car market, and Japanese makers are competing hard for a slice of the pie to offset weak domestic sales.

The recent safety issues "cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry", said Jeong Min Pak, an analyst at Fitch Ratings.

Fitch on Thursday put a negative outlook on Toyota's "A-plus" debt rating, signalling a possible downgrade in the future.

The Japanese manufacturer has long prided itself on rigorous safety controls but has been beset by a series of quality issues.

The company expanded rapidly over the past decade to meet strong demand, prompting critics to question whether it might have sacrificed its legendary quality in its quest to become the global number one.

"Toyota's image has worsened quite a lot because (the recalls) have tarnished the company's reputation for quality, which was the source of its strength," said SMBC Friend Research Centre auto analyst Shigeru Matsumura.

"This has provided a new opportunity for carmakers like GM," he said.

Aiming to regain lost market share following its bankruptcy last year, General Motors is offering US owners of Toyota cars and trucks 1,000 dollars or free financing if they buy a GM model by the end of February.

"Dealers have been getting a lot of queries from customers who have expressed worries about their Toyota vehicles," a GM spokesman said Wednesday. "We want to be able to take advantage of that interest."

Toyota said the recalls would not affect owners in Japan because the parts involved were not used in vehicles produced there.


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