Toyota Motor Corp.
) plans to recall 209,000 units of FJ Cruiser sports utility
vehicles (SUVs) due to a problem with their front seatbelt
retractors. The recalled SUVs are from the 2007-2013 model years.
Toyota revealed that the driver and front passenger seatbelts are
mounted on the vehicle's rear doors. The front seatbelts are
usually mounted to a metal pillar between the front and back
doors, but the FJ Cruiser is built without any such pillar. If
the doors are slammed repeatedly for a certain period of time,
cracks can form in the door panel around the seatbelt retractor
and the retractor may become detached.
Toyota has not yet received any reports of injuries or accidents
related to the problem. The automaker will repair the vehicles
free of cost and begin notifying their owners by mail.
Since Nov 2009, the automaker has recalled about 20 million
vehicles globally, surpassing all other automakers. The string of
recalls has led Toyota to face numerous personal injury and
wrongful death lawsuits in federal courts. Last year, the
Transportation Department of U.S. slapped a fine of $17.35
million on Toyota due to a late response regarding a defect in
its vehicles to safety regulators as well as late recall of those
According to the department, it was the maximum allowable fine
under the law for not initiating a recall in a timely manner. The
latest fine adds to $48.4 million imposed by the U.S. government
on the company in 2010 due to late recall of millions of
A few months back, Toyota had announced a major worldwide
recall of 7.43 million vehicles that included more than a dozen
models manufactured between 2005 and 2010. The recall was related
to faulty power window switches in the vehicles that can cause
fire because they did not have grease applied properly during
Despite these, Toyota recaptured the sales crown from
General Motors Company
) by selling 9.75 million vehicles globally in 2012, which
exceeded GM's sales of 9.29 million vehicles. Germany's
) came third with sales of 9.07 million vehicles for the year.
Toyota's victory can be attributed to its impressive product
lineups and marketing initiatives.
Surprisingly, sales in the company's domestic market surged 35%
despite its sluggish economy. Sales of the company's domestic
Honda Motor Co.
) grew 19% to 3.82 million vehicles in the year.
The automaker lost its No.1 position to GM in 2011 after gaining
the title from GM in 2008. The loss of crown was driven by
declining reputation due to a series of safety recalls as well as
negative impact from natural disasters in Japan and Thailand in
2011. However, Toyota had vowed to regain the top position
by increasing its dependence on the non-U.S. markets,
especially the high growth emerging markets.
Toyota, a Zacks Rank #4 (Sell) stock, posted a 22.2% rise in
earnings per share to ¥31.55 (39 cents) in the third quarter of
fiscal 2013 ended on Dec 31, 2012 from ¥25.81 in the same quarter
of prior fiscal year. Earnings were lower than the Zacks
Consensus Estimate of $1.23 per share.
Net income rose 23.4% to ¥99.91 billion ($1.23 billion) from
¥80.94 billion a year ago. The increase was attributable to lower
provision for income taxes during the quarter.
Revenues increased 9.3% to ¥5.32 trillion ($65.56 billion) on a
7.3% rise in unit sales to 2.11 million vehicles. Among all the
geographic markets, unit sales rose at the fastest pace in Asia
(53.4%) and declined at the fastest pace in Japan (15.0%).
Operating income dipped 16.7% to ¥124.76 billion ($1.54 billion)
from ¥149.68 billion in the third quarter of previous fiscal
year. The decline was attributable to a 10.1% rise in costs and
expenses during the quarter.
For fiscal 2013 ending Mar 31, 2013, Toyota raised its
consolidated vehicles sales guidance to 8.85 million units from
8.75 million units. Consequently, the automaker projected higher
consolidated revenues of ¥21.80 trillion (reflecting an expected
increase of 17.3%) compared with fiscal 2012. The upward revision
of sales outlook was based on higher overseas vehicle sales,
primarily in North America.
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