Toyota announces US sales freeze
Car giant to suspend sales of eight models following major safety recall.
Last Modified: 27 Jan 2010 09:35 GMT
Toyota has said it is taking action to ensure safety and restore consumer confidence [AFP]

Japanese car giant Toyota has said it will suspend US sales of eight models of cars, including its top selling Camry, amid a massive safety recall.

The unprecedented move comes a week after the company announced a recall of 2.3 million cars to fix potentially faulty accelerator pedals.

The recall was Toyota's second major alert in four months in the US, its biggest market.

The halt in sales announced on Tuesday means the world's number one carmaker will also freeze production on some models at its plants in the US and Canada.

The company has said it is also considering whether it needs to announce a recall on cars sold in Europe, where the same parts are used in millions of models already sold.

The problem could lead to accelerator pedals sticking in the depressed position, causing acceleration without warning.

Toyota recall: US models affected

Camry – model for years 2007 to present

 RAV4 - 2009-2010 model

 Corolla – 2009-2010 model

 Matrix - 2009-2010 model

 Sequoia - 2008-2010 model

 Tundra - 2007-2010 model

 Avalon - 2005-2010 model

 Highlander – 2010 model

The recall is expected to cause major dent in Toyota's earnings, as well as the company's reputation for safety and quality.

It could also undermine its recovery from plunging automotive sales around the world caused by the financial crisis.

The automaker's shares fell 4.3 per cent in Tokyo trade Wednesday following the sales suspension announcement.

Toyota has already forecast a $3.9bn operating loss for the year to March, with a return to profit not expected until well into 2011 at the earliest.

Annual combined North American sales of the eight cars involved in the sales suspension and recall amount to more than one million units.

Bob Carter, Toyota's US vice president, said the company was taking the measures needed to ensure safety and restore confidence among Toyota customers.

"This action is necessary until a remedy is finalised," he said in a statement.

"We're making every effort to address this situation for our customers as quickly as possible."

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