Posted: Jan 28, 2010 10:45 AM
Updated: Jan 28, 2010 10:45 AM
TOKYO - Toyota Motor Corp. said Thursday it will recall an additional 1.09 million vehicles in the United States over problems with gas pedals and floor mats - a fresh blow to the world's top automaker as it struggles to salvage its safety reputation.
The new recall would affect five models - 2008-2010 Highlander, 2009-2010 Corolla, 2009-2010 Venza, 2009-2010 Matrix, and 2009-2010 Pontiac Vibe, Toyota said.
The announcement came just a day after Toyota said it would suspend U.S. sales of eight models - including the Camry, America's top-selling car - to fix faulty gas pedals that could stick and cause acceleration without warning.
Last week, Toyota issued a recall for the same eight models, affecting 2.3 million vehicles. In late 2009, Toyota recalled 4.2 million vehicles over concerns that floor mats could bend across gas pedals, causing sudden acceleration.
The sales suspension in the U.S. - Toyota's biggest market - could endanger the company's fledgling earnings recovery. Toyota only returned to the black for the July-September quarter with net income of 21.8 billion yen ($241 million) after three straight losing quarters.
Investors continued to dump shares in the global auto giant Thursday. Toyota dropped 3.9 percent to 3,560 yen even as the benchmark Nikkei 225 stock average gained 1.6 percent to close at 10,414.29. Toyota tumbled 4.3 percent Wednesday.
"It is still uncertain how this recall problem will affect Toyota's profits. But investors are worried it could really pressure the company's overall earnings," said Masatoshi Sato, market analyst at Mizuho Investors Securities Co. Ltd.
Fitch Ratings warned Thursday the massive recalls and sales suspension could dent Toyota's recovery, especially in the vital U.S. market.
Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.
"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.
Toyota spokesman Hideaki Homma said Toyota decided to recall more vehicles due to the risk of accelerator pedals becoming stuck in the mats.
Toyota said in a statement it will fix or replace the accelerator pedals for the recalled vehicles to avoid the risk of floor mat entrapment. The company said it will replace floor mats as well for the latest recalled vehicles.
In March of 2007, Toyota started getting reports of gas pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra pickup early in 2008.
But troubles persisted in other models, eventually leading to last week's recall and the plans to suspend sales and shut down of six factories while Toyota tries to fix the problems.
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