Toyota to Recall Lexus Models to Fix Engine Parts
Toyota Motor Corp. will begin a recall of some Lexus models in Japan after saying engines in as many as 270,000 vehicles worldwide may have defective valve components that can cause problems including stalling.The company will notify Japan’s transport ministry of the recall on July 5, Ririko Takeuchi, a Toyota spokeswoman, said today by phone. “Toyota will take similar required action in the other markets where these vehicles are sold,” said company spokesman Paul Nolasco.
Toyota, the world’s largest automaker, is working to restore its reputation for quality after recalls of about 8 million vehicles globally for defects linked to unintended acceleration. The company recalled about 13,000 Lexus GX 460 sport-utility vehicles in April after Consumer Reports labeled the model a “safety risk” because it could roll over. The designation was removed in May.
“Toyota’s latest recall may further fuel the carmaker’s drop in market share in the U.S.,” said Masatoshi Nishimoto, a Tokyo-based analyst at consulting company IHS Automotive. “While sales are rising as the market recovers from the recession, they are already losing share to U.S. and other Asian carmakers.”
Toyota’s U.S. sales rose 6.8 percent in June from a year earlier, compared with Hyundai Motor Co.’s 35 percent surge. Toyota’s market share may drop to as low as 15 percent this year from 16.9 percent in 2009, IHS Automotive estimates.
About 90,000 vehicles in Japan and 137,000 units in the U.S. may have engine problems ranging from “abnormal” noise to stalling while the vehicle is moving, according to the company.
The latest recall may cost the carmaker 20 billion yen ($228 million), the Asahi newspaper reported today. Takeuchi declined to comment on the potential cost.
Koji Endo, an analyst at Advanced Research Japan in Tokyo, said the recall may cost about 10 billion yen. “Lexus cars are Toyota’s backbone models and the most expensive,” he said. “The amount won’t hurt Toyota so much, but Toyota’s brand will hurt as Lexus models are its most high-end.”
Toyota shares rose 0.3 percent to close at 3,020 yen in Tokyo.
‘Contaminated Materials’
The engine problem may result from “contaminated materials used in valve springs,” Mark Templin, U.S. group vice president and general manager of the Lexus brand, said yesterday in a conference call. “We want to take care of customers better than anybody and take care of this as quickly as possible.”
As many as eight models may be affected by the latest flaw, Takeuchi said yesterday. The models are the Lexus GS 350, GS 450h, GS 460, IS 350, LS 460, LS 600h and LS 600hL, and the Toyota Crown, according to the company.
“Due to slight variations during the manufacturing process, some foreign material may have contaminated the valve springs, resulting in potential breakage,” Toyota said on its website.
The Toyota City, Japan-based company said last week it would recall hybrid Lexus HS250h sedans because of a fuel-leak risk.
Toyota, which paid a record U.S. fine of $16.4 million this year for not complying with auto-safety regulations, said June 25 it would recall the HS250h after too much gasoline spilled in U.S. government crash tests, posing a fire risk.
Separately, Toyota has completed repairs on more than 4 million, or 78 percent, of U.S. vehicles recalled this year for issues linked to unintended acceleration, Bob Carter, the company’s U.S. group vice president, said in a conference call yesterday.
Source: Bloomberg
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