Toyota has issued a worldwide recall of 6.39 million vehicles prompted by five different problems affecting, among others, RAV4, Corolla, Yaris, Matrix, Highlander, and Tacoma models produced between April 2004 and August 2013.
IHS Automotive perspective | |
Significance | Toyota has issued a worldwide recall of 6.39 million vehicles prompted by five different problems affecting seat rails, cables connected to airbags, engine starters, steering column brackets, and windshield wiper motors. |
Implications | This is Toyota's second major recall this year after it recalled 1.9 million Prius vehicles worldwide in February because of faulty software and it is second only in magnitude to the automaker's largest ever recall of 7.4 million vehicles in 2012 over malfunctioning power window switches. |
Outlook | Despite the recalls, Toyota is expected to have achieved a record net profit of JPY1.9 trillion (USD18.6 billion) for the fiscal year that ended in March after a weaker yen pushed up its net profit more than fivefold in the quarter that ended last December. The automaker has set a target of selling an unprecedented 10.32 million vehicles globally in 2014 after leading global vehicle deliveries for a second straight year in 2013. |
Toyota today (9 April) issued a recall affecting a total of 6.39 million vehicles globally, reports Agence France-Presse (AFP). The recall, prompted by five different problems – defects affecting seat rails, cables connected to airbags, engine starters, steering column brackets, and windshield wiper motors – includes the RAV4, Corolla, Yaris, Matrix, Highlander, and Tacoma models, among others. The affected vehicles were produced between April 2004 and August 2013. "Toyota Motor Corporation announced five recalls involving 26 Toyota models, the Pontiac Vibe and the Subaru Trezia...since a few models are involved in more than one recall, the total number of vehicles that will be remedied is 6.39 million," the company said in a statement.
The problem with the spiral cable assembly attached to airbags affects 3.5 million vehicles worldwide, including 1.67 million in North America. The problem involving seat rails affects 2.32 million vehicles globally, including 670,000 vehicles in North America. Toyota vehicles being recalled in Japan include 919,654 Vitz cars, 146,678 RAV4 sport utility vehicles (SUVs), and 19,151 Porte vans, according to the nation's Ministry of Land, Infrastructure, Transport and Tourism.
The Pontiac Vibe, which is a General Motors (GM) model, is also involved in the recall since it was manufactured by the Toyota-GM joint-venture factory in Fremont, California (United States), along with the mechanically identical Toyota Matrix. The Pontiac Vibe's recall is due to the problem with the spiral cable attached to an airbag and is unrelated to a separate GM recall over ignition switches linked to at least 13 deaths. The Subaru Trezia meanwhile is involved in the recall since it is essentially a rebadged version of the Toyota Vitz-based Ractis subcompact.
Toyota said it had received two reports of fires caused by the starter defect, but added that none of the issues had caused any accidents, to its knowledge. Toyota's shares were down 3.1% at the close of today's trading on the Tokyo Stock Exchange.
Outlook and implications
This is Toyota's second major recall this year after it recalled 1.9 million Prius vehicles worldwide in February because of faulty software, and is second only in magnitude to the automaker's largest ever recall of 7.4 million vehicles in 2012 over malfunctioning power window switches (see World: 10 October 2012: Toyota issues mammoth global recall of 7.4 mil. vehicles over power window defect).
Toyota, which reportedly recalled more vehicles than any other automaker in the United States for a second straight year in 2013, had already been struggling to restore its reputation for quality after recalling more than 10 million vehicles globally for problems related to unintended acceleration in 2009 and 2010, for which it recently agreed to pay record damages to end ongoing investigations (see United States: 20 March 2014: Toyota announces USD1.2-bil. settlement over 2009–10 recalls). The company admitted wrongdoing and submitted to reviews by an independent monitor that will assess its safety reporting practices.
The automaker seems to have learned important lessons from the recall fiasco of 2009–10, when president Akio Toyoda vowed to make Toyota's regional divisions more autonomous and less dependent on Japan after testifying before the US Congress. At the start of 2013, the automaker froze new investments in car plants for three years to improve productivity and cut costs at existing plants. Toyota's revamped, leaner organisational and management structure, which came into effect in April last year, has been driving its strategy of handing ever more authority to regional operations to ensure greater flexibility in responding to local developments, particularly those that have legal implications, such as recalls. At the same time, the automaker intends to keep its nerve centre at its Japanese headquarters, which provides overall direction (see World: 24 March 2014: Toyota delegates more authority to regional operations – report). Another initiative that has been recently adopted by Toyota seeks to reduce automation and robotics at its domestic factories, underscoring the company's unwavering focus on quality and efficiency (see Japan: 8 April 2014: Toyota promotes manual-intensive production at Japanese plants).
Despite the recalls, Toyota is expected to have achieved a record net profit of JPY1.9 trillion (USD18.6 billion) for the fiscal year that ended this March after a weaker yen pushed up its net profit more than fivefold to USD5.2 billion in the quarter that ended last December. The automaker has set a target of selling an unprecedented 10.32 million vehicles globally in 2014 after leading global vehicle deliveries for a second straight year in 2013, ahead of GM and Volkswagen (see World: 23 January 2014: Toyota Group achieves 2% global sales growth in 2013, expects to break 10-mil.-unit barrier during 2014).
Looking ahead, it will not be surprising if recalls happen at a faster pace than in the past considering the kinds of fines levied against Toyota and, more recently, GM, which has been at the centre of a controversy over its handling of flawed ignition switches that the company knew of as early as 2001.