Toyota to recall 2.8 million vehicles for steering glitch

Wed Nov 14, 2012 5:17am EST
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By Yoko Kubota

TOKYO (Reuters) - Toyota Motor Corp (7203.T: Quote) said it will recall 2.77 million vehicles worldwide, including some of its popular Prius hybrid cars, for steering and water pump problems in the carmaker's second multimillion-vehicle recall in a little over a month.

The defects, which Toyota said had caused no accidents and could each be fixed in an hour or so, could cost hundreds of millions of dollars to repair, according Deutsche Securities autos analyst Kurt Sanger.

While the recall is widespread, the flaws are less serious and any damage to Toyota's reputation would likely be limited compared with massive recalls in 2009 to 2011 when unintended acceleration problems in Toyota vehicles were the suspected cause of fatal crashes in the United States.

Toyota this year recaptured the crown of the world's top automaker after last year's natural disasters, which temporarily disrupted production in Japan and Thailand, had knocked it from the top spot in 2011.

Toyota is recalling 2.76 million vehicles worldwide to fix a steering component that could be damaged by wear and tear, and 630,000 gasoline-electric hybrid vehicles to replace water pumps, company spokesman Joichi Tachikawa said. Many vehicles are targeted by both recalls, resulting in overlap.

Deutsche Securities analyst Sanger said the extent of the recall suggested a more aggressive stance by the company to address defects after its recall crisis a few years ago.

"They seem to continue to be obsessively monitoring these things and looking for potential problems before they arise," Sanger said.

Toyota gave no indication of the likely cost of the latest recall, but Sanger estimated that, including parts and labor, it could amount to 30 billion to 40 billion yen ($380-500 million).   Continued...

A Toyota Motor Corp Prius vehicle and other vehicles are displayed at the company's showroom in Tokyo November 14, 2012. Toyota said it will recall around 2.77 million vehicles worldwide, including certain models of the Prius, due to problems with the steering mechanism and the hybrid system water pump, its second multi-million car recall in two months. REUTERS/Yuriko Nakao