Toyota Motor Corp. (TM) announced that it would recall 82,200 units of its sports utility vehicle (SUV) hybrids due to malfunctioning of their computer boards. The recall would involve 45,500 units of Highlander and 36,700 units of Lexus Rx 400h from the 2006 and 2007 model years that are sold only in the U.S.
Toyota revealed that certain transistors in hybrids could be damaged due to heat generated on massive current flow during high-load driving. The fault has been caused by inadequate soldering in the computer board. In case of any damage, the power supply circuit fuse could blow up causing the vehicle to run with reduced power only for a short distance or even stop.
The automaker stated that it will start notifying the owners of the vehicle about the defects until mid-July. It will start recalling them after obtaining the replacement parts.
The past string of recalls has tarnished Toyota’s reputation, resulting in declining sales and lower vehicle resale value. In 2010, the automaker’s sales in the U.S. ebbed 0.4% to 1,763,595 vehicles while the industry sales grew 13.4% on a year-over-year basis. The company’s market share also fell 1.8 percentage points to 15.2% from 2009.
Since November 2009, Toyota has recalled more than 14 million vehicles globally in about 20 recalls, surpassing all other automakers. The Transportation Department of U.S. also imposed a fine of $48.4 million due to late recall of millions of defective vehicles.
At the beginning of this month, the automaker recalled 105,784 units of its first generation Prius cars, launched in 1997, due to a defect with their steering and gearbox. The recall affected 47,784 vehicles in Japan, 52,000 in the U.S. and the rest in U.K. and Germany.
Recently, Toyota released its guidance for the fiscal year ended March 31, 2012. The company expects the full year profit to fall 31% to ¥280 billion ($3.5 billion) from ¥408 billion a year ago driven by lower sales on the back of earthquake and tsunami in Japan and stronger yen.
The Zacks #3 Rank (Hold) company has projected global sales to decrease to 7.24 million vehicles from 7.31 million vehicles in fiscal 2011, which will reduce earnings by ¥120 billion. The automaker revealed strong yen will reduce the yearly profit by ¥100 billion.
Toyota revealed that it expects to gear up its production level from 90% of normal to near full level in July and then to completely normal by the end of the year. The automaker plans to make up for the lost production in Japan by manufacturing an additional 350,000 cars and trucks from October through March 2012. It will hire 3,000 to 4,000 temporary workers for the recovery in vehicle production.
Toyota has already lost its position as the world’s biggest car maker to General Motors Company (GM) and Volkswagen AG in the first quarter of the year.
