Toyota Motor Corp. (TM) announced that it would recall 105,784 units of its first generation Prius cars, launched in 1997, due to a defect with their steering and gearbox. The recall would affect 47,784 vehicles in Japan, 52,000 in the U.S. and the rest in U.K. and Germany.
Last month, the automaker added a new model to its Prius lineup, Prius Alpha. Prius Alpha will be sold in both 5-seater, known as Prius V, and 7-seater version, known as Prius +.
Prius V, priced at ¥2.35 million ($29,000), is equipped with nickel-metal hydride batteries like its predecessor. However, Prius+, which starts at ¥3 million ($37,000) in Japan, has lithium-ion (Li-on) batteries, which takes less space, allowing for more cabin room. Li-on batteries will be used for the first time in a Toyota hybrid.
Along with the above recall, Toyota will also recall 33,636 units of iQ small cars. As many as 21,636 units of iQs are sold in Japan between 2008 and 2009.
The past string of recalls has tarnished Toyota’s reputation, resulting in declining sales and lower vehicle resale value. In 2010, the automaker’s sales in the U.S. ebbed 0.4% to 1,763,595 vehicles while the industry sales grew 13.4% on a year-over-year basis. The company’s market share also fell 1.8 percentage points to 15.2% from 2009.
Since November 2009, Toyota has recalled more than 14 million vehicles globally in about 20 recalls, surpassing all other automakers. The Transportation Department of U.S. also imposed a fine of $48.4 million due to late recall of millions of defective vehicles.
In November 2009, the automaker had recalled the largest-ever U.S. batch of 3.8 million vehicles due to the same sticking accelerator gas-pedal problem, triggered by an untoward incident of a California Highway Patrol officers death along with his family riding on a defective Lexus ES350.
In March this year, Toyota announced recall of 2.2 million vehicles due to the infamous sticking accelerator gas-pedal problem. The recall included 769,000 units of some sport utility vehicle models, 20,000 units of Lexus sedans, and nearly 1.4 million vehicles as an extension to its November 2009 recall.
The models at stake were Toyota Highlander (2004-06), Lexus RX (2004-07), Lexus GS (2006-07), Toyota 4Runner (2003-09), Lexus LX 570 (2008-11), and Toyota Rav4 (2006-10).
Toyota, a Zacks #3 Rank (Hold) stock, reported a profit of ¥408.18 billion ($5.07 billion) or ¥130.16 ($1.60) per share for its fiscal 2011 ended March 31, 2011 that almost doubled from ¥209.46 billion or ¥66.79 per share a year ago.
The increase in profit was attributable to positive impact of ¥490.0 billion due to marketing efforts and ¥180.0 billion due to cost reduction measures, partially offset by a negative impact of ¥110.0 billion due to the earthquake in Japan and ¥290.0 billion due to unfavorable exchange rates.
Consolidated revenues in the fiscal year rose marginally by 0.23% to ¥18.99 trillion ($235.80 billion) from ¥18.95 trillion, driven by a growth in unit sales in Asia (28%) and Other regions (15%), offset partially by a decline in unit sales in Japan (11.5%), North America (3%) and Europe (7%). Total unit sales increased 0.98% to 7.31 million units during the fiscal year.
Meanwhile, Toyota’s domestic competitor, Honda Motor Co. (HMC) revealed a 38% fall in profit to ¥44.55 billion ($536 million) or ¥24.72 per share (30 cents per share) in the fourth quarter of the fiscal year ended March 31, 2011 from ¥72.18 billion or ¥39.78 per share in the same quarter of prior fiscal year.
None of the automakers could furnish any guidance for the fiscal year ending March 31, 2012 as they needed more time to complete the examination of production and sales plans due to the impact of the twin disaster in Japan.
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