Yesterday, Toyota announced a recall of up to 3.8 million cars, its biggest domestic recall ever. The company is replacing floor mats, which may cause accelerators to stick. BusinessWeek details the recall’s impact on Toyota:
…the news could have been worse for Toyota Motor Corp. The problem can be fixed with relative ease by exchanging floor mats, when some recalls involve taking apart cars. Analysts said Wednesday the flaw is unlikely to exact a great toll on Toyota’s already-suffering bottom line.
The world’s biggest automaker by global vehicle sales, Toyota was seriously battered by the credit crunch and auto slump that struck last year, sinking to its worst ever yearly loss of 437 billion yen ($4.9 billion) for the fiscal year ended March 31.
Toyota is forecasting a 450 billion yen ($5.0 billion) loss for the fiscal year through March 2010, although hopes surfaced have lately that the worst may be over, with sales recovering enough to allow Toyota to project a narrower loss.
The recall will affect 2007-2010 model year Toyota Camry, 2005-2010 Toyota Avalon, 2004-2009 Toyota Prius, 2005-2010 Tacoma, 2007-2010 Toyota Tundra, 2007-2010 Lexus ES350 and 2006-2010 Lexus IS250 and IS350.
I agree with the analysts–a floor mat recall isn’t a deal killer for Toyota. However, it does open the door for other companies (Honda? Hyundai?) to market their superior quality in an attempt to lure in concerned carbuyers.