RE­GAIN­ING TRUST

Herald Sun - Motoring - - Front Page - NEIL DOWL­ING

Toy­ota out to re­store con­fi­dence

EM­BAT­TLED car gi­ant Toy­ota is crawl­ing out of its global sales slump, with plans to lift 2011 sales by 3 per cent to 8.6 mil­lion ve­hi­cles.

But the pain caused by a very pub­lic se­ries of re­calls has dulled con­sumer con­fi­dence.

Toy­ota has been crushed by a neg­li­gi­ble 0.2 per cent sales rise for 2010 in the US — its biggest mar­ket — while the over­all US mar­ket av­er­aged 11.2 per cent of growth.

More dam­ag­ing news ar­rived this week af­ter Toy­ota agreed to pay two more safety fines of about $35 mil­lion — the max­i­mum al­low­able un­der US law — to set­tle fed­eral in­ves­ti­ga­tions over the time it took the com­pany to re­port safety de­fects.

These fines, in ad­di­tion to an ear­lier $17 mil­lion pay­ment for a sim­i­lar charge, brings to about $52 mil­lion the amount that Toy­ota has agreed to pay in civil penal­ties this year.

In the US, truecar. com se­nior an­a­lyst Jesse To­prak says ‘‘set­tle­ments with the govern­ment are a good first step, but that re­gain­ing con­sumer trust in a hotly con­tested US mar­ket would take years’’.

‘‘It won’t go away. It will be an on­go­ing strug­gle,’’ he says.

Toy­ota says the bulk of fu­ture sales growth is ex­pected to come from Asia.

It says China, the US, Canada and Europe will con­trib­ute about 8 per cent of growth, while Asia will con­trib­ute 11 per cent. China alone will have an 8 per cent con­tri­bu­tion.

Toy­ota sees Ja­pan as a neg­a­tive, be­liev­ing sales in 2011 will re­tract by 12 per cent.

Sales in Ja­pan are ex­pected to slump af­ter its govern­ment ended an in­cen­tive pro­gram in Septem­ber.

A fur­ther damp­ener is the strength of the yen against the weak US dol­lar, which is cut­ting into the prof­its of ex­porters.

The Ja­panese cur­rency is trad­ing close to a 15-year high against the US dol­lar.

In Aus­tralia, year-to-date Novem­ber fig­ures show Toy­ota has lifted sales by 7.4 per cent dur­ing the 11 months, but this is against a mar­ket av­er­age of 11.8 per cent. By com­par­i­son, Holden and Hyundai lifted yearto-date sales by 13.6 and 25.3 per cent.

Fines against Toy­ota in the US this week in­volved 2004-2005 re­calls of util­i­ties for al­leged loss of steer­ing con­trol. The other in­volved a 2007 floor-mat re­call to ad­dress un­in­tended ac­cel­er­a­tion caused by pedal en­trap­ment.

Un­der the set­tle­ments, Toy­ota did not ad­mit to any vi­o­la­tion of its fed­eral safety obli­ga­tions.

But it may not end there. Toy­ota could still be sub­ject to ad­di­tional fines and in­ves­ti­ga­tions, says the US Na­tional High­way Traf­fic Safety Ad­min­is­tra­tion.

It is be­ing in­ves­ti­gated over how it dealt with four re­calls be­tween 2007 and Jan­uary 2010, and whether it should have re­called ad­di­tional mod­els with po­ten­tial ac­cel­er­a­tor con­trol prob­lems. Toy­ota says all cases of un­in­tended ac­cel­er­a­tion were at­trib­uted to ei­ther floor mat in­ter­fer­ence or stick­ing ac­cel­er­a­tor ped­als.

Since Novem­ber 2009, Toy­ota has re­called 15.5 mil­lion ve­hi­cles world­wide, most for un­in­tended ac­cel­er­a­tion.

The biggest pre­vi­ous fine in the US, be­fore Toy­ota’s three penal­ties for more than $16 mil­lion each, was a $ 1 mil­lion fine paid by Gen­eral Mo­tors for wind­shield-wiper fail­ure in ve­hi­cles made in 2002-2003.

On a brighter note, Toy­ota will re­veal its fam­ily of Prius hy­brid ve­hi­cles at the North Amer­i­can In­ter­na­tional Auto Show next month in Detroit.

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