Toyota Motor Corp said it will recall some 3.8 million vehicles in the United States because of the risk that a loose floormat could force down the accelerator, a problem suspected of causing crashes that have killed five people. The recall includes the hot-selling Prius hybrid and would be the largest ever for Toyota, which has built a reputation for safety and quality that helped it surpass General Motors as the world's top automaker last year.
The recall also comes at a critical time for Toyota as it scrambles to squeeze spending to bounce back from record losses forecast this year amid a broad-based slump in car sales. "This is an urgent matter," said US Transportation Secretary Ray LaHood.
The US government said it has received reports of 100 related incidents that include 17 crashes and five fatalities involving Toyota vehicles. Toyota said it was too early to provide a cost estimate for the move. Deutsche Securities auto analyst Kurt Sanger estimated the cost at a modest 5-10 billion yen ($50-$100 million), saying the bigger worry was its image.
"Monetarily I wouldn't expect it to be a major issue for Toyota," he said, noting that labour costs, which typically make up the bulk of recalls, would likely be minimal. "The bigger concern is reputational." In Tokyo on Wednesday, Toyota shares were down 1.1 percent, underperforming a 0.2 percent fall in the main Nikkei average and a rise in rival Japanese car stocks.
Toyota spokesman Yuta Kaga in Tokyo said on Wednesday that the floormats subject to the recall are used only in vehicles sold in the United States. The company is also checking whether the problem originates in the floormats or the process of placing them in the vehicles, he said, without naming the floormat supplier. Toyota and US safety regulators warned owners to remove all driver-side floormats from eight Toyota and Lexus models manufactured in the last six years as an immediate safety precaution. Last month, an off-duty California state trooper and three members of his family were killed in the San Diego area in a crash of a 2009 Lexus ES350.
Before the crash, a passenger in the car had called 911 and told dispatchers that the accelerator was stuck and the car had reached 120 miles per hour (193 km per hour). The recall will cover the Camry and Avalon sedans, the Prius hybrid, the Tacoma and Tundra pickup trucks and luxury Lexus models, the IS250, the IS350 and the ES350.
Toyota's largest previous recall was in 2005 for a problem with steering rods, covering about 900,000 vehicles. The pending recall will be equivalent to about double Toyota's annual sales in the US market. "This is a negative issue and is going to cost (Toyota) very much. (It's) not good for advertising," said Yuuki Sakurai, CEO of Fukoku Capital Management in Japan.
"But I'm not worried much about this problem and whether it will remain a negative factor for Toyota in the long term. They can overcome it," he said. Toyota's sweeping recall stems from a safety issue that has been under review for the past several years.
The National Highway Traffic Safety Administration closed an investigation into floormats in Toyota vehicles that began in 2007 and resulted in a recall of more than 50,000 cars. That investigation, which focused on the Lexus ES350, concluded that grooves in the floormat could trap the accelerator if the mat was not secured with retaining hooks.