Toyota Motor Corp.
) plans to recall 11,000 units of Scion iQ mini cars due to a
defect that is preventing their airbags from deploying properly.
The recall will affect 2012-2013 model year iQs, manufactured
between July 31, 2011 and October 12, 2012.
According to National Highway Transportation Safety
Administration (NHTSA), the front passenger air bags in the
vehicles are having difficulty to deploy when needed, or deploy
in a wrong way, causing potential injury. The problem originates
from a certain cable that could be damaged when the car's
passenger seat is moved forward or backward.
Toyota will start notifying the vehicle owners and recall the
vehicles in December. Dealers will install a protective cover on
the cable to prevent it from being damaged.
A few days back, Toyota announced a worldwide recall of
2.77 million vehicles after its major recall of 7.43 million
vehicles last month. The recall involved 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 systems.
Last month's worldwide recall of 7.43 million vehicles
included more than a dozen models manufactured between 2005 and
2010. The automaker needed to fix faulty power window switches in
the vehicles that can cause a fire because they didn't have
grease applied properly during production.
The recall included vehicles sold in the U.S., Japan, Europe and
elsewhere. In North America, the company has announced plans to
recall a total of 2.47 million vehicles covering Yaris, Corolla,
Matrix, Camry, RAV4, Highlander, Tundra, Sequoia and Scion xB and
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 attributed to strong demand for
Toyota vehicles as well as a 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 revenue 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 the Chinese and European markets.
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