Toyota Motor president Akio Toyoda on Friday apologised for the carmaker’s growing recall crisis in his first scheduled public appearance (at 9pm Japanese time in Nagoya, near Toyota City) since the company halted US sales and production of its best selling models last month but did not announce a new recall, this time for the latest Prius.
Toyoda admitted that the company faced "a moment of crisis" but pledged that "the safety of customers is vital," AFP reported.
Toyoda, grandson of the company's founder, said he was "deeply sorry about the inconvenience to customers due to recalls across multiple regions".
"Believe me, Toyota cars are safe," he said, briefly switching from Japanese to English. "Please believe, customer-first is our priority."
The company would set up a new committee on quality control, Toyoda added, Bloomberg News reported.
On top of global recalls for about 8m vehicles, Japan’s government has now ordered Toyota to investigate complaints from customers about brake failures affecting the latest Prius hybrid, Japan’s best-selling vehicle last year.
The company was still considering measures related to the Prius, Toyoda said.
The carmaker would hire outside experts for its quality committee, executive vice president Shinichi Sasaki said.
The US Transportation Department is also investigating reports of brake failures in the Prius. The department’s National Highway Traffic Safety Administration received 124 reports from consumers, including four saying crashes occurred with two “minor” injuries, according to an investigation document seen by Bloomberg.
Toyota said this week it began using modified braking software on Priuses built since January.
Toyota has sold 1.615m units of the latest version worldwide, including 572,800 in Japan and 833,200 in North America, according to the company.
As a result of all the recalls, Toyota faces at least 29 lawsuits filed on behalf of customers in the US and Canada seeking a range of damages from loss of cars’ value to a return of profits. It also faces at least 10 lawsuits brought by individuals claiming deaths or injuries caused by uncontrollable acceleration.
The Prius problem is on top of the 8m recalls worldwide for problems related to unintended acceleration which have been linked to up to 19 crash deaths in the United States over the past decade.
Except for a brief, impromtu interview with a Japanese broadcaster while in Switzerland a week ago, Toyoda had not been seen on the issue until Friday, prompting criticism from public relations experts and consumers about the company's response to the crisis, Reuters noted earlier.
Toyoda, 53, took over as president last year with a promise to steer the company out of its worst downturn in history and bring greater transparency to its sprawling corporate culture.
Kazutaka Oshima, president of Rakuten Investment Management, had earlier told Reuters Toyoda needed to explain what was happening.
"A listed company, which has raised money from the capital markets, is a public entity and if the management does not want to fulfill such responsibilities it should go private," he said. "Toyoda is responsible for explaining to shareholders since they have lost a significant part of their assets."
Toyota shares have lost about US$30bn or 20% of their value since 21 January when it launched a US recall related to faulty accelerator pedals.
A source with knowledge of Toyota's discussions with Japanese safety authorities told Reuters on Friday the company was leaning towards issuing a Prius recall.
Japan's transport minister said he had heard from ministry officials that Toyota would recall or voluntarily fix affected Prius models, including exports.
On Friday Toyota sent an official in charge of technology to the transport ministry to give a detailed explanation of the electronic brake system installed in the Prius, Kyodo News said.
The company plans to fix the problem by improving the software for the antilock brake system. In Japan, Toyota has already started sending the redesigned computer software to dealers so they can implement the remedy.
The company is also currently investigating if there are any similar complaints involving other hybrid models, such as the Lexus HS250h sedan and the hybrid-only compact sedan, the Sai, which use the same brakes as the Prius.
Toyota officials have said it has already changed the computer software for the newly produced models since late January, and these will not be subject to the recall.
Analysts said the latest problems were a further unwelcome development for Toyota, but would not necessarily cause permanent damage to its image.
"If Toyota can fix the faulty brakes properly and quickly, I don't think it will have any long-term impact on the brand," Zhang Xin, an analyst with Guotai Junan Securities in Beijing, told the news agency. "After all it's been so popular in North American for so many years."
In what could be deemed a broader problem with hybrid cars, Ford said on Thursday it would roll out a software patch for consumers to address similar problems with braking reported on its Ford Fusion and Mercury Milan models.
Both Toyota's and Ford's hybrids capture the energy from braking to recharge an on-board battery to improve the economy of its petrol engine.
On bumpy roads and on ice, the regenerative brakes appear to slip, allowing the vehicle to lurch forward before the hydraulic brakes engage, Prius owners have said.
Both Toyota and Ford said they had come up with software fixes for the problem. Toyota said it had started fixing the problems last month, a step it only revealed on Thursday.
Ford's action came after Consumer Reports said one of its test engineers had experienced what appeared to be a loss of braking power with a Fusion hybrid.
Ford said it was aware of one minor accident related to the braking problem but no injuries.
The automaker notified its dealers of the problem in October but not the public because it did not believe the glitch represents a failure of the brakes.
Officials currently see the antilock brake system as the cause of brakes temporarily not working on bumpy or slippery roads.
As of Friday, 93 Prius complaints had been reported to the Japanese transport ministry, including five property damage accidents.
On Thursday, the US National Highway Traffic Safety Administration said it had launched a formal investigation into the Prius.
The Japanese transport ministry was also examining if there were any problems with Toyota's response to the complaints, although the automaker denies any coverup.
Adding to Toyota's woes, calls in the United States are increasing to expand the probe of Toyota vehicles that are not subject to the latest recalls, Reuters noted.
More than 100 incidents of unintended acceleration were reported to the NHTSA involving Toyota's Tacoma trucks among those that are not equipped with floor mats, according to Edolphus Towns, a Democrat from New York who chairs the House Oversight and Government Reform Committee.
Similarly, more than 100 complaints have also been reported to NHTSA about the 2002-2006 Camry, which are not subject to the recalls in November or January, involving problems with sudden acceleration.
The Camry was the top selling passenger car in the US last year and the automaker sold about 2.15m units of the 2002-2006 models in the United States.
Only the 2007-2010 Camry is part of the January recall over gas pedals that can get stuck in a partially depressed position.
The sudden acceleration of a 2005 Camry led to the death of a female driver in 2008 after a crash, CNN reported on Thursday.
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