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.