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January 27, 2010

Toyota Halts US Sales of Popular Models

by Mil Arcega

Japanese automaker Toyota has suspended sales of some of its most popular models in the U.S. to fix a flaw in the gas pedals that could make the cars accelerate without warning.  The suspension comes after a recall last week involving 2.3 million vehicles. Toyota officials say the problem affects only U.S.-made vehicles, but could spread to Europe, where similar accelerator parts are used. 

In an extraordinary move that sent Toyota stock prices plummeting, the world's largest automaker has suspended sales of eight of its most popular models and shut down five North American plants.  Michelle Krebs at online auto advisor Edmunds.com called the sales freeze "unprecedented."

"It represents two-thirds of the Toyota brand sales and more than half of the whole company's sales.  We've never seen anything like this before," said Krebs.

Toyota announced the recall last Thursday following reports that the accelerator mechanism in some models can wear down and cause the gas pedal to stick.  The company says it is unaware of any accidents or injuries as a result of the flaw, but news reports link the defect to several accidents in the U.S, some with fatal results.

Affected models include Toyota's top selling Camry and Corolla sedans, the Rav4, Avalon, Matrix, Tundra and sport utility vehicles such as the Highlander and Sequoia.

One Toyota owner says the company should have acted sooner.

TOYOTA OWNER1:  "I think it's a good thing, they probably should have done it a few weeks ago when they were saying it was the gas pedal and the floor mats."

U.S. auto dealers, already reeling from one of the worst sales slumps in more than two decades, say the eight models account for 56 percent of Toyota's U.S. sales.  Fresno State marketing professor William Rice says the recall could hurt the company's advertised reputation for quality and safety.

"And when people have fears, they are not going to buy and so there's going to be a significant pullback of consumer confidence, pullback of consumer trust in their products, which is going to reach all the way down into their sales," he explained.

But some customers believe Toyota is doing what responsible companies do.

TOYOTA OWNER2:  "Things happen, mistakes happen.  If they're doing a recall, they're open about it with their customers, so I think it's just going to be a temporary setback.  I don't think it's going to hold Toyota back or take anything away from their brand loyalty."

Company officials say the problem part has been traced to one U.S. supplier and does not affect vehicles made in Japanese plants.  But the problem is expected to spread to Europe, where a similar accelerator part is used.

The recall and sales suspension is just the latest in a string of quality control problems that have plagued the Japanese automaker.  Last year, Toyota recalled nearly four million cars for a similar issue.