Toyota Motor Corp.
) plans to recall 242,000 units of its Prius and Lexus hybrid
cars globally due to a defect that is reducing the effectiveness
of the brakes. All the vehicles were manufactured between Mar and
The Japanese automaker decided to recall the vehicles after
receiving 90 complaints from the drivers who said that they are
having difficulty in pressing the brake pedal. However, the
company has not yet received any reports of accidents or injuries
related to the problem.
Toyota revealed that due to a defect, nitrogen gas can leak into
the brake fluid, causing ineffectiveness of the brakes. As a
result, the company would inspect the brake booster pump assembly
on Prius and Lexus HS 250h vehicles and provide replacement if
Nearly 117,000 vehicles will be recalled in Japan. Meanwhile,
91,000 units will be recalled in North America, 30,000 in Europe
and the rest in other markets.
Automotive safety recalls were brought into focus by media after
Toyota's announcement of the largest-ever global recall of 3.8
million vehicles in September 2009, triggered by a high-speed
crash that killed 4 members of a family. Later on, a string of
recalls has led Toyota to face numerous personal injury and
wrongful death lawsuits in federal courts.
Few months ago, the Transportation Department of U.S. slapped a
fine of $17.35 million on Toyota due to late response regarding a
defect in its vehicles to safety regulators as well as late
recall of those vehicles. 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 defective vehicles.
In April, Toyota along with other Japanese automakers,
Honda Motor Co.
Nissan Motor Co.
) and Mazda Motor Corp. have decided to recall 3.4 million
vehicles globally for an identical problem. All these automakers
plan to recall vehicles for fixing defective airbag system in
their vehicles, supplied by Japanese auto parts maker Takata
Toyota recalled 1.73 million vehicles globally. Among them,
580,000 vehicles were recalled in North America, 490,000 vehicles
in Europe and 320,000 vehicles in Japan. Honda announced recall
of 1.14 million vehicles worldwide while Nissan recalled about
480,000 vehicles and Mazda about 45,500 vehicles globally.
Currently, shares of Toyota retain a Zacks Rank #1 (Strong Buy).
Other stock that worth to consider in the same industry includes
) with Zacks Rank #2 (Buy).
HONDA MOTOR (HMC): Free Stock Analysis Report
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TOYOTA MOTOR CP (TM): Free Stock Analysis
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