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February 1, 2010

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Home » Business » Auto

Woes drive Toyota to face trust crisis

TOYOTA is likely to face a trust crisis in China following a massive recall of several models over problems with sticking accelerators in the United States, Europe and China, industry analysts have said.

Tianjin FAW Toyota Motor Co Ltd will recall 75,552 RAV4 sport-utility vehicles from February 28 due to a potential flaw in their accelerator pedals, the Sino-Japanese joint venture announced last Thursday.

The recall follows similar announcements by Toyota in the US and Europe, where sales of eight popular models have also been suspended. The Japanese auto maker has already announced the recalls of 2.3 million vehicles in the US, 1.8 million in Europe, and 270,000 in Canada over faulty gas pedals.

The auto maker is meanwhile recalling some 5.55 million vehicles in the United States and Canada over problems with loose floor mats, of which a large proportion are believed to overlap with those recalls for the gas pedal problem.

As a result, the actual number of vehicles subject to recalls over faulty gas pedals or floor mats is estimated at more than 7 million around the world, topping Toyota's global sales of 6.98 million units for 2009.

Shares of Toyota have posted huge losses due to the massive recalls worldwide, dealing a heavy blow to its fame for safety and reliability.

Analysts said the credit crisis could be the most severe one since Toyota entered the Chinese market.

The auto maker got a nickname of "King of Recall" in China after it launched at least four recalls last year, involving 1 million vehicles including best-selling models such as Camry and Corolla.

He Kaiming, a senior engineer at the China Automotive Technology and Research Center, said it is normal to make recalls, but frequent recalls have sparked doubts over its quality control and management mode.

At Kaida Toyota Automobile Sale and Service Co Ltd, a Toyota dealer in Tianjin, dozens of customers have inquired about recall details and some even threatened to cancel the purchase contracts.


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