Senior executives of Toyota apologised yesterday for their unprecedented recall of millions of vehicles with faulty accelerators, as they admitted sales at the world's largest car-maker were taking a serious hit.
Shinichi Sasaki, the executive vice-president of the Japanese company, appeared alone at a press conference in front of more than 100 journalists to say that the costs of recalling nearly 4.5 million vehicles sold in North America and Europe had not yet been "taken into account". Automotive industry analysts, however, think the measure may ultimately set Toyota back $2bn or more.
Mr Sasaki admitted Toyota was "extremely worried" about sales. "Already, I am hearing that sales have been affected somewhat in January," he said. The company is due to report its third-quarter earnings tomorrow.
The media witnessed the traditional theatre of the Japanese corporate apology, with Mr Sasaki – who is responsible for quality control at Toyota – bowing deeply. But that was not enough to placate furious investors who had wanted to confront the president, Akio Toyoda, at the event in the city of Nagoya. No explanation was given for why Mr Toyoda, the grandson of the company's founder, was absent and last night there were no plans for him to hold a press conference on its own.
Toyota detailed its plans to fix faulty accelerator pedals with a small metal shim, or spacer, to prevent them from sticking and causing unintended acceleration. In addition. a separate recall for slipping floor mats, which are also linked to unintended acceleration, means almost eight million vehicles worldwide are being recalled.
As a result, Toyota is involved in a desperate fight to preserve its cherished reputation for quality. Rivals such as General Motors, Ford and Hyundai have been quick to offer discounts in an attempt to entice Toyota customers.
Toyota said it planned to re-start production of eight models, including the popular Camry, Corolla and Rav4, on Monday following an unprecedented one-week shutdown at six factories in the US and Canada.
Last month, the company said it expected its global auto sales to rise by 6 per cent this year. Of course, that forecast came before the recall and its disastrous effect on sales. Analysts have yet to revise down their forecasts in response to the crisis, but experts believe it is only a matter of time before they do.
On Monday night, Jim Lentz, who heads Toyota's operations in the US, unveiled plans for mass repairs to affected vehicles. He flatly denied any suggestion of a cover-up, but the company has been facing ferocious criticism for what has been viewed as a sluggish response to the faults and botched public relations.
That could compound the problems Toyota faces in future. Yesterday, Mr Sasaki said the company's sales tended to fall by about 20 per cent in the first month following a recall but usually recovered after that. However, he admitted: "This is unprecedented in having caused such huge problems for customers."