WRAPUP 2-Toyota extends massive safety recall to Europe

giovedì 28 gennaio 2010 11:07
 

   For more on Toyota's safety recall, click [ID:nN27231388]
 * Sales suspension could cost $550 mln a month - analyst
 * Plans to recall in Europe as well - Toyota
 * Fitch places Toyota on negative watch
 * Toyota shares extend falls as Asian rivals gain
 * Hyundai posts record Q4 operating profit
 (Adds Toyota comment on Europe recall, analyst)
 By Nobuhiro Kubo and Soyoung Kim
 TOKYO/DETROIT, Jan 28 (Reuters) - Toyota Motor Corp
(7203.T: Quotazione) is extending to Europe the recall of millions of its
most popular cars due to dangerous accelerator pedals, a
further blow to the reputation of the world's largest car
maker.
 Toyota said it had not yet determined how many vehicles in
Europe would be recalled, or when, but media and analysts have
said 2 million cars may be affected on top of some 6 million
now recalled in North America.
 The recall and a related sales and production halt in North
America of eight models including its best-selling Camry have
damaged Toyota's once unshakeable record for safety and
reliability. It comes as its grapples with a patchy recovery
from a vicious global downturn in the industry and growing
competition.
 "Toyota's got the resources to bounce back from this, but
this is the biggest crisis that they have ever faced, and Ford
and Hyundai and others are coming on strong," said Jim Ziegler,
an auto dealer consultant in Atlanta.
 Shares of Toyota fell a further 4 percent in Tokyo trading
on Thursday, taking losses since last week to more than 15
percent and wiping about $25 billion in value from Japan's
largest company by market capitalisation.
 A Toyota Europe spokeswoman said the models and exact
number of potentially affected vehicles was under investigation
but there was no need to stop production.
 Toyota late on Wednesday also offered to replace floor mats
or pedals on another 1.1 million U.S. vehicles if customers
wanted. With that voluntary measure, Toyota would be dealing
with nearly 6 million U.S. vehicles for accelerator-related
problems across its lineup, a sweeping safety action that has
emboldened its rivals.
 A further 2 million in Europe would take the total to 8
million, almost the same as its group global sales last year.
 Cars sold in Japan do not use the parts in question.
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 RIVALS BENEFIT
 Analysts said the financial damage to Toyota from the
recalls would depend on how long it has to shut production on
key models and how badly consumer confidence is shaken as
reflected in pricing of both new and used cars.
 "The sales and production suspension could cost Toyota at
least 50 billion yen ($553 million) in operating profit per
month," said Koji Endo, auto analyst at Advanced Research
Japan.
 Toyota's operating profit in July-September was 58 billion
yen.
 Battered by a plunge in global sales brought on by the
financial crisis, Toyota had been expected to post an operating
loss of around 47 billion yen in the year to March 2010, before
rebounding to a 599 billion yen profit in 2011, according to 19
analysts polled by Thomson Reuters I/B/E/S.
 "I am expecting 100 billion to 200 billion yen in operating
profit this year, but it could end up in zero or a operating
loss due to this sales and production suspension," Endo said.
"I suppose Toyota would suffer more next year because of a
damage on its brand image."
  Toyota said this week it expects a 6 percent rise in
groupwide global sales to 8.27 million units in 2010, but
according to a company spokesman in Tokyo, the outlook does not
take this sales suspension into account. [ID:nTOE60P0AA]
 RATINGS WATCH
 Fitch said it was putting Toyota on watch negative.
 "The recalls and sales and production suspension cast a
negative light on Toyota's reputation for quality, just as the
company emerges from an unprecedented downturn in the auto
industry," said Jeong Min Pak, Senior Director in Fitch's
Asia-Pacific Corporates team. "This could hamper the company's
potential sales and profitability recovery, especially in the
U.S. market."
 Shares in Asian rivals Honda Motor (7267.T: Quotazione) and Nissan
Motor (7201.T: Quotazione) rose 3.3 percent and 2.8 percent respectively.
South Korea's Hyundai Motors (005380.KS: Quotazione), which beat
expectations with a record profit for the fourth quarter, rose
4.1 percent. [ID:nTOE60N00Q]
 "Honda, Nissan and Ford Motor (F.N: Quotazione) stand to benefit if
Toyota experiences a prolonged sales slump," Kota Yuzawa, auto
analyst at Goldman Sachs in Tokyo, wrote in a memo to clients.
 Looking to gain from Toyota's slip, General Motors Co
[GM.UL] said on Wednesday it was offering Toyota customers
payouts of up to $1,000 or zero-percent financing for up to
five years on most of the GM line-up.
 Hyundai, unlike GM, said it would not introduce any
measures to lure customers from suffering Toyota, but analysts
say it could be a following wind for a company already stealing
market share.
 "Toyota's latest recall in the United States could help
Hyundai's business there," said Park Jung-Seob, market
strategist at Daeshin Securities.
 ($1=90.32 Yen)
 (Additional reporting by Bernie Woodall, Kevin Krolicki, John
Crawley and Helen Massey Beresford; Editing by Lincoln Feast)