Toyota Faces Growing Crisis Over Quality Problems

Toyota Motor Corp.'s reputation for quality is coming under increasing pressure as consumer complaints about its vehicles surge, prompting a potential recall of its environmental showpiece, the Prius. Consumer complaints about 2010 Prius vehicles have climbed to 21 from just six last week, leading the U.S. government's auto safety regulator to open a formal investigation into braking issues with the hybrid car. A Prius recall would be the third in the past several months by Toyota, affecting around 300,000 vehicles worldwide.

Key Takeaways:

• The 2010 Prius is affected by a software glitch that has led some drivers to complain that the brakes on their cars don't work immediately when the cars are being driven on bumpy roads.
• Around 2,000 cars in Canada would be affected by a potential recall of the 2010 Prius model.
• Toyota has faced two previous recalls in the past several months, affecting about eight million vehicles worldwide, and has seen the value of its used vehicles downgraded by industry rating service Kelley Blue Book for the second time in less than a week in the U.S. market.
• The potential recall of the Prius follows a crisis over quality problems that has led Toyota to halt sales of its most popular vehicles in Canada and the United States due to potentially sticky gas pedals.
• Senior Toyota officials have apologized and announced the creation of a task force to improve the quality of Toyota vehicles, while President Akio Toyoda has been questioned about the company's response to the crisis.

Statistics:

• 21: Number of consumer complaints about 2010 Prius vehicles in Canada.
• 6: Number of consumer complaints about 2010 Prius vehicles in Canada last week.
• 300,000: Number of vehicles potentially affected by a global recall of the 2010 Prius.
• 2,000: Estimated number of cars in Canada that would be affected by a Prius recall.
• 8 million: Number of vehicles affected by Toyota's previous recalls.
• 3.5%: Decrease in the average value of Toyota's vehicles in the U.S. market due to downgrades by Kelley Blue Book.
• $300 to $750: Range of decrease in the value of recalled Toyota vehicles in the U.S. market.
• 132,000: Number of Toyotas sold as part of the U.S. government's Cash for Clunkers incentive plan.

Sources:

• Bloomberg/The Globe and Mail
• Toyota
• Car Allowance Rebate System
• Maritz Canada Inc.
• Kelley Blue Book
• The New York Times
• Transportation Canada