Toyota chief finally apologises for world’s biggest recall

AKIO Toyoda capped off a tumultuous week for the company that bears his name by formally apologising for the world’s largest automotive safety recall for the first time at 9pm in Japan on Friday night.

Breaking his near-total silence on the “crisis” at Toyota Motor Corporation (TMC) headquarters in Nagoya, the grandson of Toyota’s founder insisted his company’s vehicles were still safe and said Toyota had yet to decide whether to issue a separate recall for the third-generation Prius hybrid, which is the subject of an internal investigation into braking “issues”.

“I'm deeply sorry about the inconvenience and concern we have caused customers but, believe me, Toyota cars are safe,” said the TMC president in his first major public speech since the world’s biggest car-maker recalled almost seven million vehicles globally last month.

“I, Akio Toyoda, deeply regret the inconvenience and concern caused to our customers and others by our recent recalls of multiple vehicle models across multiple regions.”

Mr Toyoda also admitted that the unprecedented recalls had left Toyota, which has staked its reputation on quality and reliability, “in crisis”.

“Today, as so many people have expressed their sense of unease, I realised the necessity of asking you all here on short notice to share with you the following,” he said.

Toyota’s recall to fix sticky accelerator pedals was last week extended from the US – where eight of its most popular models were suspended from sale – to Europe, China and elsewhere.

Including a separate recall to fix the floor mats of 5.3 million vehicles in North America in October, a total of 6.6 million vehicles are now affected.

Although Toyota vehicles sold and produced in Australia remain unaffected, Toyota says it will advise owners of current-generation Prius models as soon as possible as to how it will apply to their vehicles the same “improvement” made to Prius vehicles on the production line in late January.

“As Toyota revealed yesterday (February 4), new Prius now in showrooms include an improvement,” said Mr Toyoda. “For Prius in the hands of customers, I have instructed that consideration be made as soon as possible regarding the way to address such units. Once a decision is made we will inform the public.

“As for the accelerator pedal recall in the United States, Europe, China and other countries and regions, repair-work preparations are being made at our dealers. As soon as these preparations are complete, once again, we will inform you.”

While the sticky throttle problem has been linked to 19 crash deaths in the US over the past decade, Toyota’s investigation into the Prius braking problem, which Toyota insists is not safety related, was instigated after Japan’s Transportation Ministry last Wednesday ordered it to look into reports of inconsistent braking feel on irregular road surfaces in the 2010 model.

Japanese reports suggest Toyota will soon recall or voluntarily fix all affected examples of the Prius, which was Japan’s top-selling model last year following the launch of the new model there in May.

Since then, Toyota has sold 311,000 MkIII Prius vehicles, including around 200,000 in Japan, 103,000 in the US and 2000 in Australia, bringing the total number of Priuses sold to more than 1.6 million.

Toyota has received two complaints related to braking issues with the third-generation Prius in Australia, while the US National Highway Traffic Safety Administration said it has received 124 complaints, with four crashes alleged to have been caused by the problem.

The question marks over the latest Prius, which has become an icon for the global hybrid movement since the original version appeared in Japan in 1997, continue to linger as Toyota this week launches the first Australian-built petrol-electric model, the Camry Hybrid – more than 175,000 of which have been sold globally.

It also follows a $35 billion – or 20 per cent – slump in the value of Toyota shares since the January 21 recall related to faulty accelerator pedals.

Apart from the cost of repairing the recalled vehicles and law suits that could result in claims valued at hundreds of millions of dollars, the US Transportation department can impose federal fines of up to $US16.4 million ($A18.9m) for car-makers that fail to recall defective vehicles in a timely manner.

Adding to Toyota’s woes, Volkswagen last week announced it aims to increase its group vehicles sales by almost 60 per cent and improve profit margins by 2018 in its bid to oust the Japanese giant as the world’s largest car-maker.

The world’s third-largest car-maker has targeted a mid-term sales forecast of eight million vehicles, followed by more than 10 million in 2018.

While VW Group sales increased by 1.1 per cent to 6.3 million vehicles in 2009, when it commanded an 11.4 per cent share of the global automotive market, Toyota sales fell 13 per cent to 7.81 million in the same period. Toyota has targeted 8.27 million sales in 2010 – more than a million short of the 9.37 million vehicles it sold in 2007.

Toyota shares lifted from a 10-month low in Tokyo on Friday after the company reported better-than-expected quarterly financial results and raised its fiscal outlook despite the recall issues.

Left: Toyota Motor Corporation President & CEO Mr Akio Toyoda.

Meantime, Ford shares closed five per cent lower in the US on Thursday following a similar issue with the braking performance of its Ford Fusion and Mercury Milan hybrid models. Both Toyota and Ford said they had developed software upgrades to fix problems related to the regenerative braking systems of both brands’ hybrid models.

Toyota applied a fix on the Prius production line in January – a step it did not reveal until last Thursday – while Ford notified its dealers of the problem in October but did not advise the public because, like Toyota, it does not believe the problem represents a failure of the brakes.

Toyota said it was not aware of any incidents related to the Prius braking issue, while Ford said it was aware of only one minor related accident.

As part of Friday’s media address by Mr Toyoda, 53, Toyota released a number of new details related to both the accelerator pedal safety recall and Prius braking problem, including:* Toyota says it first became aware of “isolated” reports of sticking accelerator pedals in North America in late October 2009* Toyota announced on January 21 that it would recall specific vehicles in North America to correct sticking accelerator pedals * Toyota says it has received no reports of accidents caused by sticking throttle pedals in Europe, but says it identified 26 reports linked to the issue in Europe, dating back to November 2009* Toyota announced on January 28 that it would implement a recall of eight Toyota models in Europe (seven in the UK), following a “thorough investigation”* “Quality refinement” measures to rectify the accelerator pedal problem, which was formally announced in late January but “did not represent any risk or safety concern”, were first put in place on the production line as early as August 2009* “The change introduced in August 2009 was a quality refinement,” said Toyota. “However, since the implementation of this change, Toyota became aware of new, different, but related cases of the pedal sticking. This led to further investigations and as a consequence, a safety recall has been implemented.”* Toyota did not stop production of affected models in Europe, as it did in the US, because of the model-by-model running change in production* Seven models are affected by the throttle pedal recall in the UK, including petrol and diesel models, totalling 180,865 vehicles* Models recalled in Europe, where the total will be up to 1.8 million vehicles, include automatic versions of the Aygo built between February 2005 and August 2009, iQ models built between November 2008 and November 2009, Yaris models built between November 2005 and September 2009, Auris models between October 2006 and January 5, 2010, Corolla models between October 2006 and December 2009, Verso models between February 2009 and January 5, 2010 and Avensis models built between November 2008 and December 2009* Toyota says priority will be given to older vehicles among those recalled for sticking accelerators, reflecting its claim that the problem is caused by wear and does not occur suddenly* Priority will also be given to those vehicles that have been the subject of specific customer complaints, “although these are very few in number”* Toyota said its US dealers had started fixing accelerator pedals and notifying affected owners on Friday, while recall work in the UK will start immediately after the arrival of the required parts on Wednesday (February 10)* Toyota is now sending letters to owners of vehicles affected by the throttle pedal recall, and will follow up with a second letter* Accelerator pedal replacement will take “about 30 minutes” to complete at no cost to the owner and the vehicle’s warranty will not be affected* No Lexus models are part of the accelerator pedal recall, although Toyota’s Prius brake issue investigation will extend to other hybrids including Lexus models* Manual Aygo and all RAV4 models are the only Toyotas not affected by the throttle pedal recall in the UKToyota says MkIII Prius customers have reported that under certain braking conditions, such as when hitting a bump, pothole or driving on a low-grip surface, they notice a change in the brake feel.

“This change in brake feel is due to the specific set-up of the anti-lock braking system (ABS). Prius’s braking ability is not compromised and Toyota does not believe this is a safety issue,” the company said in Friday’s statement.

“However, to deal with the customer comments about the change in brake feel, an update in the software in the brake control system was made on Prius production from late January 2010. This change was made to give the driver a more consistent feel when applying the brakes.”

It is believed the problem effects braking feel when the ABS system engages, as the system switches from regenerative mode.

Appearing on Friday alongside executive vice-president Shinichi Sasaki, Mr Toyoda said he would personally head a new global quality taskforce to improve quality, and that Toyota would strive to regain the trust of its customers as soon as possible.

“From Toyota’s beginning, ‘contributing to society through the manufacture of automobiles’ has been its key principle,” he said.

“To that end, since taking office in June last year, I have endeavoured, based on our ‘customer first’ and ‘genchi genbutsu’ fundamentals, to thoroughly establish a product-focused management.

“However, we, the ones supposed to relay to people the attractiveness of automobiles, have, instead, imparted on them worry. I regret this more than anything.

“Under the banner ‘Let’s build better cars’, we will go back to the basics of ‘customer first’ and ‘genchi genbutsu’ and once more, deeply, consider what ‘customer first’ really means. All our employees around the world, all of our dealers and all of our suppliers will unify in their utmost efforts to regain the trust of our customers as soon as possible.

“Let me just say that I will take the lead toward improving quality around the world, by establishing a global quality special task force that will conduct regional quality improvement activities.

“The committee headed by the president will conduct various improvement initiatives. The key initiatives are: “First, while verifying the causes that led to the recalls, Toyota will once again inspect every process – quality in design, quality in production, quality in sales and quality in service.

“Second, Toyota will enhance the customer information research offices to improve regional information collection and genchi-genbutsu activities.

“Third, to develop quality-management professionals, Toyota will establish an ‘Automotive Centre of Quality Excellence’ in key regions.

“Fourth, Toyota will seek confirmation and evaluation from outside experts – in line with industry's best practices – of its newly improved quality-control management, based on the above improvements.

“In addition, Toyota will work to increase the frequency of communication between itself and regional authorities.

“To provide customers with satisfying products in each and every region, Toyota has long promoted the autonomy of its regional subsidiaries. From now on, we intend to further this autonomy, listen carefully to each and every customer and improve quality,” said Mr Toyoda.