Toyota says its largest ever safety recall is likely to cost the equivalent of about 1.5 billion euros. More than eight million vehicles could be affected by acceleration problems.
Commentators say Toyota shares have been hit, as well as its reputation. Managers remain optimistic, however, after posting their strongest operating profit in six quarters.
Toyota’s Managing Director, Takahiko Ijichi, said:
“Cost performance and quality are not mutually conflicting. Something that is high quality has a better cost performance. And so, we have no plans to lower quality in order to increase cost effectiveness.”
But some experts say the problems with the acceleration pedal and floor mats are likely to result in a big fall in Toyota sales this year. US authorities say they are monitoring how the recall is being handled.
US Transportation Secretary Ray LaHood said:
“If anybody owns one of these vehicles, stop driving it, take it to a Toyota dealer because they believe they have a fix for it.”
Until recently Toyota had been expected to celebrate greatly improved earnings. The company was one of the biggest beneficiaries of government incentives last year designed to spur sales.