Toyota in another global recall

Shanghai Daily, January 27, 2011

Toyota recalled nearly 1.7 million cars worldwide Wednesday for fuel leaks, the latest in a ballooning number of quality problems that could add another dent to its tarnished reputation in the crucial United States market.

Toyota's latest recalls are mostly in Japan, but they also include the IS and GS Lexus luxury models in North America, where the world's No. 1 auto maker faces the biggest obstacles to winning back customer trust.

Toyota's US sales lagged last year despite an industry recovery, putting General Motors Co within reach of reclaiming its title as the world's biggest car maker by number of vehicles sold. Toyota Motor Corp became the top-selling auto maker in 2008, dethroning GM after nearly 80 years of dominance.

There were no accidents suspected of being related to the latest recall, according to Toyota. The car maker said it had received 77 complaints overseas, 75 of them in North America, and more than 140 in Japan.

Koji Endo, auto analyst with Advanced Research Japan Co in Tokyo, said the latest recall will cost Toyota about 20 billion yen (US$240 million), and that won't hurt its earnings performance by much.

"But there is that perception of here we go again, and that hurts Toyota's image, especially in North America," he said.

Toyota is likely trying to be aggressive with recalls, carrying them out quickly before they turn into bigger problems, and so the latest one is not a sign that quality is taking another plunge for the worse at the auto maker, Endo said.

Still, the manufacturer - whose "Toyota Way" production methods have been praised and emulated around the world - can't hope to claim to have put the problems behind it either.

The largest number of the affected vehicles was in Japan at nearly 1.3 million - the second-largest auto recall in the nation's history - and involving two different problems.

The biggest recall in Japan was in 2005, also by Toyota, when nearly 1.3 million Corolla cars were recalled for a faulty headlight switch and some other problems, according to the Japanese transport ministry.

The latest quality hitch comes on top of the spate of massive recalls that began in late 2009, mostly in North America and which now cover more than 12 million vehicles.