Toyota Issues Corolla/Matrix Recall; Extends Tacoma Warranty Over Rusty Frames

Toyota Motor Sales U.S.A Inc. is recalling 539,500 compact Corolla sedans and Matrix hatchbacks sold in the U.S. over defective window attachments, a campaign so large that it nearly matches the number of vehicles the quality-focused auto maker had to fix in all of 2007.

Last year, Toyota conducted four recall campaigns that captured 583,191 vehicles, according to National Highway Traffic Safety Admin. data. By comparison, Chrysler LLC and Daimler AG, including Mercedes-Benz, initiated an industry-high 25 recall campaigns that had implications for 2.1 million vehicles.

The U.S. industry saw a total 588 recall campaigns in 2007 that affected 14.5 million vehicles, including medium- and heavy-duty trucks, buses, niche vehicles, motorcycles and trailers.

The latest Toyota recall comes on the heels of decision earlier this month to extend the warranty on ‘95 through ‘00 model-year Tacoma small pickups due to excessive frame corrosion.

In some instances, Toyota may repurchase vehicles from owners Dealerships will make the determination.

Toyota sold about 813,000 Tacomas over the 13-year period, says spokesman Mike Michels. But those with corrosion problems represent “a very small percentage.” Michels declines to provide an exact number of vehicles, calling the warranty data “proprietary.”

“This is not a recall, it’s a pretty small number of trucks and concentrated in regions with heavy salt usage,” Michels says.

Toyota buying back rusted Tacomas in some cases.

“It’s even a particular salt that’s causing the problem. And it’s clearly salt, because we have these same trucks in other regions, such as the Northwest, where it’s plenty wet and they’re not rusting.”

Toyota’s major markets are the East and West Coasts and the Sunbelt, regions with little or no salt application during the winter months.

Michels says the auto maker has repurchased a number of Tacomas because the repair would cost more than the vehicle is worth. Toyota buys back the truck at a price 1.5 times greater than Kelly Blue Book’s “excellent condition” rating for the particular model.

The auto maker also is providing owners with a discount coupon towards the purchase of another Toyota product.

Rosemary Shahan, president of Consumers for Auto Reliability and Safety advocacy group, calls the re-purchase move an “unusual resolution” to the problem and a “remarkably sound” marketing decision.

“My guess is (Toyota) did some focus grouping on this and determined it a good way to retain and make new sales. It’s one way to expand your market,” says Shahan, whose group played a key role in enacting California’s lemon law. “We see so many cars where consumers face a lemon and can’t get anything done.”

Rebecca Lindland, an analyst at Global Insight Inc., says the warranty extension could prove expensive, but Toyota apparently considers it the cost of doing business.

Toyota’s “reputation for quality is priceless,” she says. “And they’ve had some bumps in the road lately, which, given their recent growth, is not unreasonable. But the bottom line is Toyota stakes its reputation on quality, and they will spend whatever it takes to put this behind them.”

Regarding the Corolla/Matrix recall, Toyota says loose bolts could cause the driver and passenger windows on some ‘03 and ‘04 vehicles to separate from their regulators. The recall campaign does not include models equipped with manual windows.

Owners likely would hear a rattle or other unusual noise when operating the power window. Toyota will notify owners by mail beginning later this month.

The recall also includes 122,598 Pontiac Vibe hatchbacks. Toyota assembles the Vibe for General Motors Corp. on the Matrix platform at the auto makers’ New United Motor Mfg. Inc. joint venture in Fremont, CA.

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