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Toyota expands vehicle recall
Cars in China and Europe join US on faulty accelerator pedals list.
Last Modified: 29 Jan 2010 04:28 GMT
Analysts say the latest recalls and sales suspensions could derail Toyota's recovery [AFP]

Toyota has expanded a massive recall of its vehicles to China and Europe, deepening a crisis that threatens to undermine the world number one carmaker's reputation and derail its financial recovery.

The Japanese car giant said on Thursday that it would start a recall in February for 75,500 RAV4 vehicles made in China between March 2009 and January 2010 over concerns about potentially faulty accelerator pedals.

Toyota, which had already announced a US recall and sales suspension affecting eight models and 2.3 million vehicles in the past week, is still unsure how many vehicles could be affected in Europe.

The recalls centre on fears that a fault in pedals could cause them to stick and cause acceleration without warning.

Toyota says condensation around the faulty pedals' arm can cause them to react slowly when a driver presses on them and in rare cases, pedals can get stuck.

Also this week, Toyota announced the recall of a separate 1.09 million vehicles in the US over concerns that floor mats could bend across accelerator pedals, causing sudden acceleration.

The latest recalls are in addition 4.2 million vehicles called back in late 2009 over floor mat concerns but some of the models in recalls overlap.

Toyota said it was near a solution and CTS Corporation which makes the pedal parts, is producing redesigned pedal assemblies that is said to fix the problem.

CTS also makes pedals for Honda, Mitsubishi, Nissan and Ford vehicles in China, but the company said pedals made for those manufacturers do not have the same design.

Still, Ford on Thursday halted production of some full-sized commercial vehicles in China because they contain CTS pedals.

Recovery in danger

The latest recalls and sales suspension in the US - Toyota's biggest market – could endanger the company's fledgling earnings recovery, Fitch Ratings warned on Thursday.

In video


Al Jazeera's Zeina Awad reports on the impact of Toyota's safety recalls in the US

Toyota only returned to the black for the July-September quarter with net income of $241m after three straight losing quarters.

Fitch placed Toyota's credit rating of 'A+' on watch negative, meaning the rating could be downgraded. That could increase the interest rate Toyota pays on any debt.

"The recalls and sales and production suspension cast a negative light on Toyota's reputation for quality, just as the company emerges from an unprecedented downturn in the auto industry," Fitch said in a statement.

Toyota shares fell 1.8 per cent in Friday's morning session after the expanded recall, extending a losing streak that has seen its stock tumble 15 per cent in the past week.

In March of 2007, Toyota started getting reports of pedals being slow to rise after being depressed for acceleration. Engineers fixed the problem in the Tundra model early in 2008.

But troubles persisted in other models, eventually leading to the latest recalls.

Meanwhile, US politicians said they intend to hold a hearing on February 25 to review the complaints of the sudden unintended acceleration.

Source:
Agencies
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