Toyota Motor Corp.
) share price dropped 1.3% to $130.26 on Sep 27, following its
announcement of recalling 615,000 Sienna minivans in the U.S. The
automaker is recalling the vehicles of model years 2004-2005 and
2007-2009 to fix a problem in the shift lever assembly.
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Toyota has made several recalls and the drop in share price might
be a reflection of shareholders' fading confidence owing to that.
Product recalls, amid the competitive scenario, can seriously
dent a brand's image.
Toyota said that a possible damage to the shift lock installed in
the vehicle may lead the minivan to move out of the park position
even if the brake pedal is not pressed. As a result of this, 21
accidents and 2 injuries were registered.
Earlier this month, Toyota recalled 369,000 vehicles worldwide,
including about 235,000 in the U.S., roughly 74,000 in Japan and
37,500 in Europe. The automaker will recall 200,000 Highlander
Hybrid models manufactured from 2006 to 2010 and Lexus RX 400h
vehicles developed during 2006 to 2008 to fix a hybrid-system
problem. The SUV transistors get overheated in the hybrid system,
which results in sudden halt of the vehicle.
Toyota also announced the recall of another 169,000 vehicles
including Lexus IS 350, IS 350C and GS 350 manufactured between
2006 and 2011. Toyota is recalling these vehicles to repair an
engine bolt defect. These vehicles also face the problem of
halting suddenly as bolts get loose in the variable valve timing
Automotive safety recalls were brought into focus by media after
Toyota's announcement of the largest global recall of 3.8 million
vehicles in Sep 2009, triggered by a high-speed crash that
claimed 4 lives. Later on, Toyota had to face numerous personal
injury and wrongful death lawsuits in federal courts, hampering
Other than Toyota, many other players in the automobile market
are witnessing a series of recalls. In Aug 2013, Dongfeng Honda
Automobile Co., the Chinese arm of
Honda Motor Co., Ltd.
), announced that it is recalling all Siwei CR-V vehicles
manufactured from Mar 2, 2010, to Aug 30, 2012 to fix a defective
front shock absorber piston rod. Honda is recalling almost
Ford Motor Co.
General Motors Company
) also announced that they are recalling vehicles to fix certain