- Title: JAPAN: Toyota braces for sales hit from recall as costs mount
- Date: 3rd February 2010
- Summary: NAGOYA, JAPAN (FEBRUARY 2, 2010) (REUTERS) SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT, SEATED AT NEWS CONFERENCE (SOUNDBITE) (Japanese) SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT, SAYING: "The sales forecast is something that we're extremely worried about." TELEVISION CAMERAS FILMING NEWS CONFERENCE (SOUNDBITE) (Japanese) SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT, SAYING: "The numbers for January haven't come out yet, but since we've announced the recall, but from what I've heard customer orders have fallen." JOURNALIST TYPING (SOUNDBITE) (Japanese) SHINICHI SASAKI, TOYOTA EXECUTIVE VICE PRESIDENT, SAYING: "As I am in charge of market strategy and quality control and am additionally in charge of customer service calls, I believe that I hold enough responsibility to talk in place of the CEO." NEWS CONFERENCE BUILDINGS AROUND NAGOYA STATION PEOPLE WALKING OUT OF NAGOYA STATION (SOUNDBITE) (Japanese) HARUMI TANAKA, 21-YEAR-OLD COLLEGE STUDENT, SAYING: "As it's a company that you could say represents Japan, there will definitely be some ripples." TOYOTA CARS ON ROADS (SOUNDBITE) (Japanese) TOSHIHIRO INOUE, 49-YEAR-OLD FINANCIAL SERVICES WORKER, SAYING: "With their recent return to profit, and now this news about the recall comes out, I can only hope that it doesn't affect the economy." CUSTOMERS LOOKING AT TOYOTA CARS RECEPTIONIST WALKING TO OPEN HOOD FOR CUSTOMERS RECEPTIONIST OPENING HOOD MORE OF CUSTOMERS LOOKING AT TOYOTA CARS CUSTOMERS WALKING INTO TOYOTA SHOWROOM
- Embargoed: 18th February 2010 12:00
- Location: Japan
- Country: Japan
- Topics: Finance,Transport
- Reuters ID: LVA7RJV2KIQ2YBXLB95SHWG8CY7P
- Story Text: Toyota's unprecedented recall of millions of vehicles with faulty accelerators is taking a toll on sales and may force the world's largest automaker to cut 2010 sales forecasts.
U.S. auto sales for January due later on Tuesday (February 2) are expected to show a sharp drop for Toyota after it pulled eight of its most popular models from showrooms last week following a series of crashes linked to unintended acceleration.
In the first public comment from an executive at Toyota's head office, the company's executive in charge of quality control said there had been a bigger-than-usual impact from the recall.
"The sales forecast is something that we're extremely worried about," Executive Vice President Shinichi Sasaki told a news conference in the central Japanese city of Nagoya.
"The numbers for January haven't come out yet, but since we've announced the recall, but from what I've heard customer orders have fallen," he added, noting the company will report its third-quarter earnings on Thursday (February 4).
Although Toyota says the occurrence of such problems is rare, public confidence has been shaken by continuous coverage of the saga, including the harrowing details of a Lexus crash blamed on a stuck accelerator that killed an off-duty California state-trooper and three members of his family last year.
Sasaki, who appeared alone in front of more than 100 reporters, offered no deep bow of apology unlike in other 'scandal'-related media conferences in Japan.
Toyota's President Akio Toyoda, the grandson of the company's founder, has not formally addressed the public or media on the recall problems. While in Davos, Switzerland last weekend, he appeared briefly on broadcaster NHK and apologised to consumers.
"As I am in charge of market strategy and quality control and am additionally in charge of customer service calls, I believe that I hold enough responsibility to talk in place of the CEO," Sasaki said.
The world's largest automaker detailed its plans on Monday (February 1) to fix the faulty pedals with a small metal shim, or spacer, to prevent them from sticking.
On top of a separate recall for slipping floor mats also linked to unintended acceleration, almost 5 million vehicles worldwide are being recalled.
Toyota said it would restart on February 8 production of the eight models including its popular Camry, Corolla and Rav4 models after an unprecedented one-week shutdown at six plants in the United States and Canada.
Sasaki said costs were not taken into account with the recall and said they would monitor sales before reviewing their 2010 forecast.
Toyota last month forecast global auto sales to rise 6 percent this year but has since said that did not take the impact of the recalls into account.
The costs for the recall and the shutdown now look to come to roughly 100 billion yen to 200 billion yen ($1.1 billion to $2.2 billion), two analysts estimated.
Residents of the city of Nagoya, which is heavily dependent on Toyota's fortunes, said they fear the worse for their local economy.
"As it's a company that you could say represents Japan, there will definitely be some ripples," said 21-year old college student Harumi Tanaka.
"With their recent return to profit, and now this news about the recall comes out, I can only hope that it doesn't effect the economy," added 49-year-old Toshihiro Inoue, a worker in the financial service sector.
Toyota also faces a growing number of lawsuits claiming it and its U.S. supplier CTS Corp endangered drivers by not acting sooner to fix the problems with faulty accelerator pedals.
Lawsuits announced on Monday in the U.S. claimed Toyota had ignored signs of trouble with some of its top-selling models. The charges are part of what is expected to be a wave of litigation against the automaker for claims ranging from losses on car resale values to injury and death.
Analysts and dealers said it would take months for the automaker to fix all of the vehicles at risk of having an accelerator pedal getting stuck in the open position.
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