Toyota Motor Corp will suspend US sales of eight models subject to a massive safety recall, an unprecedented move that sent its shares tumbling and raised questions about the timing of its earnings recovery.
Toyota said it would also halt production of the models, including the best-selling Camry, at plants in the United States and Canada in the first week of February.
Shares in the world's biggest automaker suffered their biggest slide in eight months, falling 4.3% in a Toyko market down 0.7% on Wednesday. Last week, Toyota announced it would recall 2.3 million vehicles in the United States to fix potentially faulty accelerator pedals, its second large recall in four months in the United States, its biggest market.
The series of recalls threaten to damage Toyota's reputation for safety and quality that helped it ascend to the top of the global auto industry. "This unprecedented automotive decision indicates how serious a safety problem this is," said Michelle Krebs, senior analyst, Edmunds.com. "We've gone from floor mats to recalls for wear items to a full shutdown, and I can't help but think that the company's credibility is being called into question."
Toyota said the production halt would initially last a week before being reviewed.
Officials could not recall a sales or production suspension resulting from vehicle defects on such a scale. Toyota is considering whether it needs to issue a recall in Europe as well, where the same parts are used for some models.
"The recall itself won't be a big problem for Toyota's earnings, but suspending production and sales could have a big impact depending on how long it lasts," said Koji Endo, auto analyst, Advanced Research Japan.
Bob Carter, vice president, Toyota U S group said the automaker is taking the actions to ensure safety and restore confidence in Toyota among consumers. "This action is necessary until a remedy is finalised," Carter said in a statement. "We're making every effort to address this situation for our customers as quickly as possible." The plants where the models are made are located in Indiana, Texas, Kentucky, and in Ontario Reuters
source: dna
