Toyota Recalls Spark Frenzy

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Toyota's Safety Crisis

Toyota Motors Sales U.S.A. Inc.’s latest recalls have dealers pleading for calm as price-tracker Kelley Blue Book raises red flags about declining consumer demand and market value for the auto maker’s vehicles.

John McEleney, chairman of the National Automobile Dealers Assn., warns Congress not to “give countenance to any unsubstantiated rhetoric which has the effect of unjustifiably alarming the public about the Toyota brand.”

McEleney’s remarks are part of a statement issued as the House Committee on Oversight and Government Reform reschedules its hearing titled: Toyota Gas Pedals: Is the Public at Risk? Inclement weather forces legislators to set the hearing, originally scheduled for Feb. 10, for Feb. 24.

“Recalls are quite common in the auto industry and involve virtually every manufacturer at one time or another,” says McEleney, who also is a Toyota dealer. “We urge all government officials, whether in Congress or the Administration, to be careful what they say while the investigation goes forward. Ill-advised comments reverberate through the entire American buying public, impacting auto dealerships, their employees and our local and national economy.”

In the wake of Toyota’s fourth safety recall in less than three weeks, an action that affects some 133,000 Toyota Priuses in the U.S., Kelley Blue Book’s Juan Flores, director-vehicle valuation, reports a “shadow” has been cast over older Prius models.

“Older Priuses not affected by the recall have seen a drop in their used-car value by 1.5%,” Flores says in a statement, adding Kelley Blue Book expects “weakened demand to persist” as the auto maker also investigates complaints of steering problems with its ’09 and ’10 Toyota Corolla and some models in its Lexus luxury-brand lineup.

If a glut of Toyota vehicles accumulates, “there could very well be further softening of Toyota’s values,” Flores says.

The Prius recall, which also affects the Lexus HS 250h, centers on a software glitch that causes a split-second delay when the vehicle’s brakes are deployed on rough roads.

Ignore “rhetoric,” says NADA Chairman John McEleney.

Meanwhile, Toyota also recalls about 7,300 Camry midsize cars to prevent a potential brake-fluid leak. Cars equipped with 4-cyl. engines could lose braking power if a power steering hose inadvertently rubs against a front brake tube.

Earlier callbacks related to sudden acceleration reports – some linked to ill-fitting floor mats and others tied to a component malfunction – bring to some 7.7 million the number of vehicles affected by recent Toyota recall campaigns.

Says TMS President and Chief Operating Officer Jim Lentz: “We’re committed to doing everything we can – as fast as we can – to restore consumer trust in Toyota, and these recalls are part of this effort.”

A running production change was initiated last month to address the Prius problem and a similar change is planned for this month to improve the performance of the HS 350h.

Last month, Toyota reported its lowest January sales volume in a decade as it suspended deliveries and production of eight models implicated in a sudden-acceleration recall.

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