Toyota Motor Corp.
) announced another worldwide recall of 2.77 million vehicles
after its major recall of 7.43 million vehicles last month. The
latest recall involves 14 models including the Prius hybrid and
2000-2006 Corolla compact sedans that are subject to inspection
and repair due to a problem with their steering and water-pump
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The Toyota-City, Japan based automaker will recall 1.52 million
vehicles in Japan and 1.25 million vehicles overseas, including
670,000 Prius hybrids in the U.S., mainly to replace the electric
water pump. In rest of the vehicles, the company would inspect or
replace the defective steering intermediate extension shaft,
which can cause unwanted steering.
Toyota has not received any reports of crashes or injuries
related to the defective vehicles. The company has decided to
notify owners of recalled vehicles next month. Repairs would take
an hour for fixing the steering shaft and about 90 minutes to
replace the water-pump.
The last month's worldwide recall of 7.43 million vehicles
included more than a dozen models manufactured between 2005 and
2010. The automaker needs to fix faulty power window switches in
the vehicles that can cause fire because they didn't have grease
applied properly during production.
The recall includes vehicles sold in the U.S., Japan, Europe and
elsewhere. In North America, the company will recall a total of
2.47 million vehicles covering Yaris, Corolla, Matrix, Camry,
RAV4, Highlander, Tundra, Sequoia and Scion xB and xD models.
The past string of recalls has tarnished Toyota's reputation,
resulting in declining sales and lower vehicle resale value.
Since November 2009, the automaker has recalled more than 15
million vehicles globally in more than 20 recalls, surpassing all
other automakers. The company lost its No.1 position to
General Motors Company
Ford Motor Co.
) in terms of sales volumes in the U.S.
However, Toyota has recovered well from the twin disaster in
Japan and severe flooding in Thailand last year, apart from the
backlash of a series of safety recalls in the past. In the second
quarter of fiscal year ended September 30, 2012, the Zacks #3
Rank (Hold) company saw more than threefold increase in profits
to ¥257.92 billion ($3.28 billion) or ¥81.44 ($1.04) per share
from ¥80.42 billion or ¥25.65 in the same quarter of prior fiscal
The increase in profits can be attributable to strong demand for
Toyota vehicles as well as positive impact from the company's
cost control measures. However, profits were lower than the Zacks
Consensus Estimate of $1.62 per share.
Revenues in the quarter grew 18.2% to ¥5.41 trillion ($68.75
billion) on a 14.9% rise in sales volume to 2.16 million units.
Vehicle sales increased in all the regions, except Europe.
Operating income more then quadrupled to ¥340.61 billion ($4.33
billion) from ¥75.39 billion in the second quarter of previous
However, Toyota projected lower consolidated vehicles sales of
8.75 million units for fiscal 2013 ending March 31, 2013, down 50
thousand units from the prior guidance. The automaker also
lowered its consolidated revenues outlook to ¥21.30 trillion (up
14.6% from fiscal 2012) from the prior guidance of ¥22.00
trillion. The downward revision of sales outlook was based on
difficulties in Chinese and European markets.