Posts Tagged ‘toyota trouble’

Is Toyota Facing Financial Trouble?

Japanese giant receives unexpected warning.

by on May.31, 2013

Toyota boss Akio Toyoda with the Lexus ES.

There was a time when Toyota was said to have “more money than God by one of its key competitors. And its latest earning report was unquestionably impressive. Nonetheless, the Japanese giant has received an unexpected warning that could signal financial troubles ahead.

Though Moody’s has given Toyota’s latest bond offering a strong “Aa3 rating,” it also has issued a negative outlook for the future that reflects potentially broader problems with the Japanese economy.

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“While disruptions caused by several natural disasters contributed to (a) period of underperformance, the company’s financial results have also suffered from product quality issues, market share erosion, and cost pressures exacerbated by volatile market conditions,” the ratings agency explains. “Because it is more reliant than its peers on units and components exported from Japan, Toyota’s earnings have significantly weakened because of the fluctuation in the currency market since the financial crisis of 2008-09.”


Toyota Pays Record Fine for Recall Delay

Fourth big penalty for Japanese maker for delaying safety campaign.

by on Dec.18, 2012

Lexus will pay a record fine for delaying the recall of nearly 150,000 RX models due to an unintended acceleration-related problem.

In a further blow to its well-honed image of quality, reliability and safety, Toyota has confirmed it will have to pay a record $17.35 million fine for delaying yet another recall related to unintended acceleration problems.

The news comes even as the Japanese giant heads towards the end of the year in a dubious race with rival Honda to see who will have the most vehicles recalled due to safety problems for all of 2012.

The latest fine marks the fourth time since 2010 that Toyota has had to shell out the maximum allowable penalty for delaying recalls.  Three years ago, fines levied by the National Highway Traffic Safety Administration totaled $48.8 million – but that covered three separate recalls in which Toyota failed to act in a timely manner on a known safety defect, as required by U.S. law.

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According to a five-page draft agreement uncovered by the Detroit News, Toyota now will not only have to pay $17.35 million for delaying the recall of 154,000 Lexus RX crossovers last June but it will also have to hold monthly meetings related to safety issues.  It will also have to make significant internal reforms.


Toyota Sharply Downgrades Earnings Forecast

Blames strong yen, Thai flooding.

by on Dec.09, 2011

Toyota faces a grim fiscal year.

Weeks after company officials expressed their hopes that things were getting back to normal, Toyota officials have issued a bleak forecast that sharply downgrades its earnings for the rest of the fiscal year.

Having earlier cut earnings projections due to the March 11 earthquake and tsunami that devastated Japan – and led to months of automotive production cuts – Toyota now says the strong yen, as well as Thai flooding, will reduce its earnings for the fiscal year, which ends March 31, by more than half.

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The maker now anticipates a net profit of 180 billion – or $2.3 billion at the current exchange rate – down from the 390 billion yen it forecast in August.  During a conference call this morning it also said revenues will dip from the earlier forecast of 19 trillion yen to just 18.2 trillion, or $234.4 billion.


Feds Clear Toyota in Sudden Acceleration Investigation

NASA/NHTSA study finds no mysterious electronic gremlins.

by on Feb.08, 2011

Toyota CEO Akio Toyoda with the Prius V hybrid.

A 10-month government investigation has cleared Toyota of charges that its products might be unexpectedly surging out of control due to mysterious electronic gremlins.

The study, conducted for the National Highway Traffic Safety Administration in cooperation with the space agency, NASA, explored possible causes of what has come to be known as either unintended acceleration or sudden acceleration in Toyota cars.  But researchers found no fault with the automaker’s electronic throttle control systems, the Department of Transportation reported Tuesday.

“We enlisted the best and brightest engineers to study Toyota’s electronics systems, and the verdict is in. There is no electronic-based cause for unintended high-speed acceleration in Toyotas,” declared U.S. Transportation Secretary Ray LaHood.

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That’s a major reversal of the position the administration’s top transportation official took barely a year ago, when Toyota announced the second in a series of recalls addressing mechanical problems that have been linked to runaway vehicles.  At one point, LaHood told reporters he thought motorists should park Toyota products until they were repaired.


Toyota Recalls Push Into 2011 as 245,000 Lexus Sedans Are Targeted

Global total to top 1.7 million.

by on Jan.26, 2011

Targeted for recall, the 2007 Lexus GS.

Despite recent protestations by a senior Toyota executive that the worst of the maker’s safety problems are behind it, the Japanese giant is getting 2011 off to a shaky start.

The potentially faulty installation of fuel pressure sensors is forcing the maker to recall 245,000 sedans in the U.S.  And, unusually, the recall is significantly larger overseas, where repairs will be needed on another 1.5 million Toyota vehicles – for a total of more than 1.7 million products.

The overseas recalls involves vehicles with defects that could lead to a gasoline leak, Toyota revealed.

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The U.S. recall involves 2006 and 2007 Lexus GS 300 and GS 350 models, 2006 – 2008 Lexus IS 350 sedans, and 2006 – 2009 IS 250 models.  A wide range of passenger cars, minivans and crossovers are being called back in Europe and Japan, including the maker’s Japanese premium model, the Toyota Crown.

In a Detroit appearance, earlier this month, Toyota’s top U.S. executive suggested that the maker has “regained” some of the ground it lost last year as a result of its seemingly endless series of safety issues.  They included problems not only with so-called unintended acceleration, but also brake and steering issues and even excessive corrosion that could cause parts to fall off Toyota Sienna minivans.


Recalls Reach A Near-Record

Toyota drives numbers to highest level since 2004, but Ford, Chrysler add to list with last-minute recalls.

by on Dec.31, 2010

A seemingly endless stream of recalls by Toyota meant 2010 saw more safety-related recalls than any year since 2004.

The following story has been revised to reflect the latest recalls announced New Year’s Eve by two Detroit automakers.

Driven by a series of massive safety-related actions at Toyota, the number of vehicles recalled in the U.S., this past year will have reached near-record levels.

But Toyota wasn’t alone, as two of Detroit’s Big Three demonstrated, collectively announcing the recall of another 165,000 vehicles during the final hours of 2011.

Still, were it not for the Japanese maker’s multiple problems, the number of recalls in 2010 would have come in at less than half of the previous record, the 30.8 million vehicles involved in safety-related recalls back in 2004.  As it stands, an analysis by the Associated Press shows that about 20 million cars, trucks and crossover will have been impacted in 2010 the highest figure since the industry set that record, six years ago.

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It’s not clear whether that means there has been a sudden and unexpected setback in the effort to improve automotive quality, reliability and safety.  Particularly in the light of Toyota’s problems, government regulators have ramped up their own efforts – partly because internal Toyota documents suggested the National Highway Traffic Safety Administration may have become too cozy with the auto industry.


Toyota Pays Another Record Fine For Late Recalls

Japanese maker settles probe – at cost of $32.4 million.

by on Dec.21, 2010

Toyota pays a record $32.4 million in fines to settle two federal probes of delayed recalls.

Toyota has agreed to pay a record $32.4 million in fines levied by federal regulators for admittedly delaying the recall of six million potentially unsafe vehicles.

The settlement of the two separate probes by the National Highway Traffic Safety Administration caps a disastrous year for a Japanese automaker once reputed to build some of the safest and most reliable vehicles on the road.  Since Toyota announced the first of two major efforts to resolve a so-called unintended acceleration problem, in late 2009, it has since recalled more than 11 million vehicles worldwide, most in the U.S.

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Toyota paid a previous $16.4 million fine, last April, for delaying the second of the two unintended acceleration recalls after learning about potentially sticky accelerator pedals.  At the time, that was the largest fine ever levied by the NHTSA.

The latest move involves payment of another $16.4 million for delaying the October 2009 recall for pedal entrapment – which can occur when loose carpets or floor mats trap the gas pedal and make it difficult to slow down.  The maker agreed to take action only after a widely-publicized crash that killed a California police officer and three members of his family.  Toyota has also agreed to pay $16 million for delaying the 2005 recall of 4Runner SUVs with defective steering rods that could lead to a loss of control.

Paying the $32.4 million in fines reflects Toyota CEO Akio Toyoda's promise to cooperate with U.S. regulators.

Officially, Toyota is not admitting guilt with the payment of the two new fines, and the company is attempting to put a positive, year-end spin on the moves, Steve St. Angelo, Toyota’s North American safety czar insisting, “These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA.”

St. Angelo’s post was created, earlier this year, after a bitterly confrontational series of hearings, on Capitol Hill, during which lawmakers grilled senior executives including Toyota CEO Akio Toyoda.  The grandson of the company founder promised to both improve relations with U.S. regulators and take steps to overcome Toyota’s worsening quality and safety issues.

Until the unintended acceleration issue captured the nation’s attention, in mid-2009, Toyota enjoyed what analysts like Joe Phillippi, of AutoTrends Consulting, described as a reputation for building “bulletproof” products.

But that image has been sorely tarnished over the last 15 months – despite evidence emerging in a federal probe of the unintended acceleration problem that at least some of the blame goes to driver error.

The problem, for Toyota, is that its safety problems have extended far beyond just runaway cars.  Just this month, the maker has announced the recall of nearly 100,000 Sienna minivans due to brake problems that could cause the loss of braking performance.  There have also been recalls for defective brakes on the newest Prius hybrid, as well as overheating of older versions of the Prius, a Toyota “halo” car; extensive corrosion of minivans and pickups that could cause parts, such as spare tires, to fall onto the highway; stalling problems with the Corolla and Vibe models; steering issues and a variety of other safety-related problems.

How American motorists are responding to Toyota’s sudden safety shock is unclear.  Some recent studies suggest the maker has gotten through the worst in turns of public perception.  But sales data is less upbeat.  For October and November, Toyota was the only major automotive brand to suffer a sales decline at a time when the overall industry was reporting its strongest performance in several years.

Earlier this year, Toyota Senior Vice President Don Esmond told that he expects the company’s existing customers to remain loyal to the brand, but that it will become “more difficult to conquest,” or win over buyers from the competition.

Conquest sales were a major factor in Toyota surging to the number two spot in the U.S. market.  In recent months, however, as its momentum has slowed, Toyota has again slipped behind Ford but remains the third-best-selling manufacturer in the country.

Whether the decision to pay the new record fines will actually help Toyota begin the process of repairing its reputation remains to be seen.  But the maker hopes it will smooth ruffled feathers in Washington.  In recent years, government regulators had tried to take a more cooperative approach with the industry, but Toyota bragged about taking advantage of that relationship.

Prior to last February’s Capitol Hill hearings internal documents leaked out showing the maker crowing about a 2007 recall for loose floor mats.  By convincing NHTSA not to order a larger recall, Toyota officials bragged, they saved $100 million.

“I expect Toyota to work cooperatively in the future to ensure consumers’ safety,” says Ray LaHood, Secretary of the U.S. Department of Transportation.

The new $32.4 million fines may be a record for the auto industry, but they’re miniscule compared to the estimates of what just the unintended acceleration issue could ultimately cost Toyota – more than $2 billion according to one forecast by Deutsche Bank.

There are hundreds of lawsuits now working their ways through the courts, including a massive class action in progress in California.  Meanwhile, the automaker is under the microscope as a federal grand jury in New York looks at possible criminal charges stemming from delayed recalls.

Toyota Recalling Nearly 100,000 Minivans

Impacts newest 2011 Sienna model.

by on Dec.13, 2010

Toyota is recalling nearly 100,000 of its 2011 Sienna minivans due a brake-related problem.

Toyota is ending 2010 much the way the year began, with another recall, though this latest safety action is significantly smaller than the sudden acceleration-related callback that shut down a sizable share of Toyota’s production operations last January.

The newest recall involves 94,000 of the Japanese maker’s newest minivans.  A poorly designed brake light switch bracket is mounted too close to the 2011 Toyota Sienna’s parking brake which, when even partially engaged can result in the bracket being deformed.  In turn, that can leave the brake lights lit and even result in the brakes themselves being partially applied.

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Over time, that could lead to a loss of braking power and premature brake wear, the maker reported.

The news is another setback for a company that has been struggling to get its safety problems behind it.  Since October 2009, when the first sudden acceleration recall was announced, Toyota has called back more than 11 million vehicles, the vast majority of them in the U.S.  The second sudden acceleration recall, in January 2010, forced the maker to temporarily stop producing a number of key models.


Toyota Takes Another Hit With November Sales

Hefty incentives, free maintenance and new safety campaign fail to reverse slump.

by on Dec.01, 2010

Even the Prius saw sales slide, with incentives needed to keep the hybrid's metal moving out showroom doors.

It was a good month for the U.S. auto industry – most of the industry, anyway, but despite a mighty push to overcome its ongoing safety problems, Toyota bucked the market trend by posting a 3.2% sales decline for November.  Adjusted to a daily sales basis, the decline, the maker noted, was 7.3%

The Japanese giant, long the industry benchmark, was clearly unable to keep up with the competition during a month when Detroit’s long-troubled makers all posted double-digit gains.  In fact, other than Toyota, it was hard to find any brand that didn’t report a solid month, Nissan up 45%, year-over-year, and Audi reporting an all-time record for November, which could help the German brand push past the 100,000 sales mark for the first time ever in the U.S.

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The poor showing was particularly troubling for Toyota which, in October, was the only major automaker to report a decline – of 4%.

What’s going wrong?  “Without new product to compete with and stripped of its bulletproof quality reputation, Toyota is forced to sell on the deal,” Edmunds analyst Jessica Caldwell said in a statement.


Toyota Repairing 650,000 Prius Hybrids

by on Nov.30, 2010

Is that steam? The Toyota Prius faces another snag.

The big number recalls continue at Toyota, more than a year after the maker announced the first safety campaign caused by runaway vehicles.  The latest action involves 650,000 of Toyota’s third-generation Prius hybrid due to a defective coolant pump that can cause the vehicles to overheat and lose power.

Nearly 60% of the Prius hybrids involved in what is officially a service action were sold in the United States, according to Toyota, which says it will cover the cost of any repairs conducted at one of its dealerships.

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The maker says the problem involves an electric water pump that can slowly permit air bubbles to enter the coolant lines.  As that happens water circulation slows and temperatures rise, resulting in overheating  of the hybrid-electric componentry.

Initially, that should trigger a warning light, but if the problem is left unattended, the vehicle would drop into a “fail-safe” mode where power would be reduced.  It is not clear from Toyota’s statement whether permanent damage to the vehicle might result if the problem were still ignored.


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