Toyota Motor Corp
) is recalling around 342,000 Tacoma midsize pickup trucks to fix
faulty front seat belts. The recall would involve car models from
2004-2011. However, no accidents have been reported due to the
We believe the growing numbers of recalls by Toyota can have a
detrimental effect on its future business; and thereby affect its
profits going forward.
Previously, in Jul 2013, Toyota recalled 185,000 units of some
subcompact car models globally due to a problem with their
electric power steering system. The recalled vehicles included
Yaris (know as Vitz in Japan) and Verso-S (aka Lactis in Japan)
In April, Toyota and other Japanese automakers,
Honda Motor Co.
Nissan Motor Co.
) and Mazda Motor Corp., had decided to recall 3.4 million
vehicles globally for an identical problem related to fixing
defective airbag system in their vehicles, supplied by Japanese
auto parts maker Takata Corp.
Toyota has often been criticized due to its series of vehicle
safety recalls over the past few years. In Sep 2009, the company
made the largest-ever global recall of 3.8 million vehicles,
triggered by a high-speed crash in California that killed 4
members of a family. Later on, a string of recalls led Toyota to
face numerous personal injury and wrongful death lawsuits in
Consequently, in Dec 2012, the U.S. Transportation Department
fined the company with $17.35 million due to a late response
regarding a defect in its vehicles to safety regulators as well
as late recall of those vehicles. This was not the first time the
company registered heavy fines. Toyota also suffered a fine of
roughly $48 million in 2010, imposed by the U.S. government, due
to late recall of millions of defective vehicles.
Fuji Heavy Industries Ltd
), which retains a Zacks Rank #1 (Strong Buy), is one of the
stocks in the related sector that is worth considering for
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HONDA MOTOR (HMC): Free Stock Analysis Report
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TOYOTA MOTOR CP (TM): Free Stock Analysis
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