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February 3, 2010

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Home » Business » Auto

Toyota recall 'unprecedented'

A TOYOTA executive said the damage to the company's sales from its global recall for a gas pedal problem may be greater than previous recalls because of the unprecedented scale.

Toyota Motor Corp Executive Vice President Shinichi Sasaki, who oversees quality control at the world's top auto maker, acknowledged a perception the company was slow in responding to the problem of accelerators that could stick when held down.

But he said the Japanese car maker had made finding a fix a priority. Although the recalls were announced on January 21, it was not until Monday that a United States executive outlined details of what had to be fixed.

Sasaki said he didn't yet know how the recalls would hurt sales or earnings. He said, generally after a recall, sales drop about 20 percent in the first month and then gradually recover.

The damage from the latest recalls may be greater, he said. "This is unprecedented in having caused this huge problem for customers," Sasaki told a news conference in Nagoya.

According to numbers Toyota released yesterday, the recall covered 4.45 million cars worldwide ? 2.48 million in North America, 1.71 million in Europe, some 80,000 in China and 180,000 in other regions, including the Middle East.

The recall spans some 2.3 million cars in the US, including some of Toyota's best-selling models such as the Camry and Corolla. It has recalled millions more because of floor mats that can catch the gas pedal.

The numbers are huge partly because of Toyota's stellar sales success around the world, but also because all car makers try to use the same part across many models to cut costs.

Sasaki said there were no electronic problems in the vehicles being recalled in the US and the earlier recall for floor mats was "totally unrelated" to the pedal problem.

There was some fear among American consumers that the floor mat recall may have been related to the problem with gas pedals.

Some analysts have been critical of Toyota, saying it acted too slowly.

Masaaki Sato, who has written books on auto makers, including Toyota, said the biggest mistake was not having President Akio Toyoda immediately explain and calm fears.


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