It is recall days again for Toyota. For the second time in just over a month, the Japanese automaker needs to bring back millions of vehicles for repairs. The issue now is steering and water pump defects, which Toyota says has yet to cause any accidents, but could fail through normal wear and tear.
Last month, the company needed to call back 7.4 million vehicles because of a power window problem. That recall was the single biggest mulligan since 1996, when Ford had to repair some 8 million of its vehicles because of ignition switch glitches.
This month's woes pale in comparison, involving only 2.77 million cars, with repair likely tackled within an hour. To date, the recall in Canada appears to be confined to 14,816 Prius vehicles, which has both the water pump defect as well as the faulty steering shaft issue.
The recall is still expected to cost hundreds of millions of dollars. Even steeper, of course, is the price paid by Toyota's reputation, which has suffered blows in recent years with the manufacturing issues that emerged between 2009 and 2010. Then more than 14 million Toyota and Lexus cars had to be recalled when floor mat, gas pedal and braking problems resulted in unintended acceleration, an issue that was believed to have led to a series of fatal accidents.
The majority of the vehicles involved in this most recent recall are in Japan, with slightly under 700,000 in the U.S. and 500,000 in Europe. The models involved include the Corolla, Prius Hybrid and Wish.
There's no good time for a recall, but the timing will be particularly vexing for Toyota, having had to aggressively rebuild its long-reputation for high quality. This year it regained its top-spot among automakers for global sales, an achievement made all the more tougher by plummeting sales in China, a result of territorial tensions between Japan and China.
So far, the market is taking Toyota's latest troubles in stride, knocking its stock down by 1 per cent to US$77.09 at midday.
Toyota Recalls 7.4 Million VehiclesThe Japanese automaker Toyota is now recalling almost 7.5 million cars around the world, reports CNBC's Phil LeBeau.