February 5, 2010 / 9:05 AM / 7 years ago

WRAPUP 2-Toyota chief to address safety as Prius recall eyed

7 IN. DI LETTURA

  For more on Toyota's safety recall, click [ID:nN27231388]
 * Akio Toyoda to face media on safety issues at 1200 GMT
 * Toyota preparing recall of new Prius - source
 * Ford to fix software on hybrids to address brake issue
 * Ford shares down, Toyota steadies after 2 week slump
 * Toyota has lost a fifth of its market value since recall  (Recasts with Toyoda briefing plans, Transport min comments)
 By Nobuhiro Kubo and Bernie Woodall
 TOKYO/DETROIT, Feb 5 (Reuters) - Toyota Motor Corp (7203.T) President Akio Toyoda will front up on Friday for the first time over a string safety issues rocking the company as it prepared to recall its iconic Prius hybrid over braking problems.
 Toyota, the world's No.1 automaker, is already recalling some 8 million cars around the world 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 has not been seen on the issue, prompting criticism from public relations experts and consumers about the company's response to the crisis. [ID:nTOE612039]
 Toyoda, 53, is the grandson of Toyota's founder who 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. [ID:nTOE60S0A7]
 Toyota said he will brief media in Nagoya, near its Toyota City headquarters, at 9.00 p.m. (1200 GMT)
 Kazutaka Oshima, president of Rakuten Investment Management, said 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 $30 billion or a fifth of their value since Jan. 21 when it launched a U.S. recall related to faulty accelerator pedals.
 NOW PRIUS
 Safety regulators in both the United States and Japan are now investigating braking problems with the company's latest version of the Prius, a pioneer in gasoline-electric hybrids and Japan's top-selling car last year.
 A source with knowledge of Toyota's discussions with Japanese safety authorities told Reuters on Friday the company was leaning towards issuing a recall.
 Japan's transport minister said he had heard from ministry officials that Toyota would recall or voluntarily fix the Prius' affected, including those shipped overseas.
 Since its launch last May, Toyota has sold 311,000 units of the newest version of the Prius -- around 200,000 in Japan and another 103,200 in the United States.
 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," said Zhang Xin, an analyst with Guotai Junan Securities in Beijing. "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 Motor Co (F.N) 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. [ID:nN0497845]
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 To read a Breaking Views column on Toyota, click on
 [ID:nN04171554]
 To view a Reuters Insider Breaking Views, see:
 Breakingviews: Fine Mess for Toyota
 link.reuters.com/jym57h
 See also: Toyota Options Bullishness Proves Fleeting
 link.reuters.com/pyj77h
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 HALO DENTED
 The Prius has emerged as a kind of environmental "halo car" for Toyota, an icon of green design with an intense following among loyalists, which has lifted the public image of the whole company.
 "I feel a bit anxious," said 61-year-old Yasuo Ishizuka, who drives a Prius taxi in Tokyo. "As a taxi driver security is very important to me and hearing that such troubles occured to brakes, I cannot drive feeling safe anymore."
 Both Toyota's and Ford's hybrids capture the energy from braking to recharge an on-board battery to boost mileage from its gasoline engine.
 On bumpy roads and on ice, the regenerative brakes appear to slip, allowing the vehicle to lurch forward before the traditional brakes engage, Prius owners have said.
 The U.S. National Highway Traffic Safety Administration said it has received 124 complaints from drivers of the third-generation Prius. Four crashes were alleged by motorists to have been caused by the problems, NHTSA said.
 SOFTWARE FIXES
 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 No.2 U.S. automaker by sales 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.
 Ford shares were ended almost 5 percent lower on Thursday.
 Shares in Toyota picked up from a 10-month low on Friday in Tokyo after it reported better-than-expected quarterly results and raised its outlook despite its growing recall-related problems. [ID:nTOE61300G] [ID:nN04116985]
 The stock ended up 1.1 percent at 3,315 yen defying a sharp drop in other auto stocks and the broader market. .N225
 "The issues facing Toyota are not going to be solved that easily," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. "What we're seeing today is a technical rebound because it was sold so much."  (Additional reporting by Chang-Ran Kim, Yumiko Nishitani, Taiga Uranaka and Elaine Lies in TOKYO; Fang Yan in SHANGHAI; John Crawley in WASHINGTON; Writing by Lincoln Feast; Editing by Jean Yoon)  

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