Toyota Motor Corp. (TM) announced that it would recall 8,000 units of Innova minivans in Vietnam due to three defects, including a faulty pressure cylinder for rear wheel brakes.
The seven-seater vehicle is the best selling model of Toyota in the country. The automaker has not yet received any complaints related to the problems in the vehicles.
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.
Last month, Toyota announced recall of 2.2 million vehicles due to the infamous sticking accelerator gas-pedal problem. The recall included 769,000 units of some sport utility vehicle models, 20,000 units of Lexus sedans, and nearly 1.4 million vehicles as an extension to its November 2009 recall.
The models at stake were Toyota Highlander (2004-06), Lexus RX (2004-07), Lexus GS (2006-07), Toyota 4Runner (2003-09), Lexus LX 570 (2008-11), and Toyota Rav4 (2006-10).
In November 2009, the automaker had recalled the largest-ever U.S. batch of 3.8 million vehicles due to the same sticking accelerator gas-pedal problem, triggered by an untoward incident of a California Highway Patrol officers death along with his family riding on a defective Lexus ES350.
Toyota, a Zacks #3 Rank (Hold) stock, reported a 39% fall in profit to ¥93.63 billion ($1.14 billion) or ¥29.86 (36 cents) per share in the third quarter of fiscal 2011 ended December 31, 2010 from ¥153.22 billion ($1.86 billion) or ¥48.86 (59 cents) per share in the year-ago quarter. The fall in profit was attributable to lower sales in the Japan, North America and Europe as well as stronger yen.
Apart from the recall of Toyota vehicles, the recent recall of Ford Motor Co.’s (F) best selling pickup truck, F-150, in the U.S. and Canada also gave way to a lot of hustle bustle. The recall of 150,000 units of F-150 trucks followed a request made by the National Highway Traffic Safety Administration (NHTSA) to fix a glitch with the front air bags.
FORD MOTOR CO (F): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
Zacks Investment Research
