Tuesday, January 26, 2010

Toyota Halts Sales on 8 Models as Recall Fallout Threatens Brand

At the Los Angeles Times, "Toyota Temporarily Stops Selling Eight Models Covered by Recall":

Toyota Motor Corp. has taken the unprecedented stop of halting sales and production of eight models, including the top-selling Camry and Corolla, because their accelerator pedals can stick and cause runaway acceleration.

Toyota sent an email to its roughly 1,200 U.S. dealers late Tuesday, asking them to immediately cease selling the vehicles. In addition, it told them to refrain from selling certain used versions of the same models.

At the same time, Toyota said it is halting production of the models in five assembly lines in the U.S. and Canada, effective Monday.

The news is the latest blow to Toyota's once-ironclad reputation for quality and safety, which has come under increasing fire in recent months amid rising complaints about of unintended acceleration and other defects.

The eight models affected by the news represented 57% of Toyota's sales in the U.S. last year, including the automaker's Lexus and Scion brands.

"This could be an extended issue. It is very serious," said Aaron Bragman, auto industry analyst at IHS Global Insight. He called the sales freeze, known in the industry as a stop sale, a "disaster," and pointed out that it came as Ford Motor Co., General Motors Co. and Hyundai Motor Co. all were improving their quality and mounting aggressive sales and marketing campaigns.
I've been following this case through the Times' coverage. See December's investigative report, "Toyota Found to Keep Tight Lid on Potential Safety Problems: A Times Investigation Shows the World's Largest Automaker Has Delayed Recalls and Attempted to Blame Human Error in Cases Where Owners Claimed Vehicle Defects."

And especiall, from October, "Toyota's Runaway-Car Worries May Not Stop at Floor Mats."