Toyota Motor Corp. is moving to end the crisis that has battered its image, with its president offering an apology in his first news conference since a recall fiasco erupted two weeks ago. The company also lifted a halt on sales of eight vehicle lines that had been declared defective because of potentially faulty accelerator pedals.
The world's largest auto maker, whose share price and reputation for quality have been hammered since it announced it would stop selling its most popular vehicles on Jan. 26, faces "a moment of crisis," said Akio Toyoda, the latest Toyoda to take the wheel at the company his family founded in the 19th century.
But there is still considerable doubt about whether Toyota has contained the damage from two massive recalls - one because of floor mats potentially jamming gas pedals and another because the pedals themselves are sticking - and from the revelation of brake problems in the Prius, its flagship green vehicle, which could lead to a third recall.
Asked if the company is climbing out of this, one veteran auto industry source said, not yet.
"You've got to be able to draw a circle around 'this,'" the source said. "'This' is still expanding. That's the issue."
But Bernie Wolf, a professor of economics at York University in Toronto, said Toyota is handling the crisis well, similar to the way Maple Leaf Foods Inc. dealt with a listeriosis crisis in 2008.
"I think Toyota will get back to where it was," Prof. Wolf said. "Recalls happen to all companies. What I don't know is whether they acted promptly enough."
Mr. Toyoda would not say whether the company will recall the 2010 Prius models that have generated complaints to U.S. and Canadian regulators.
It will, however, establish a task force that will undertake measures to improve quality at Toyota's global operations.
"For the Prius cars that are in the hands of customers already, I have instructed that a solution be found as quickly as possible," he said. "Once the decision is made, we will inform the public."
The 53-year-old Mr. Toyoda has been criticized for being virtually invisible since the crisis erupted with the announcement of the sales freeze on such vehicles as the Corolla compact, the Camry mid-sized car and the RAV4 crossover utility vehicle. Production of eight models was also stopped for a week.
Toyota's share price has been smacked down in trading on the New York Stock Exchange to a close Friday of $74.71 (U.S.) from $86.78 on Jan. 26.
Standard & Poor's Corp. put Toyota's debt on credit watch Friday with negative implications.
"These developments may affect the company's reputation for quality, weakening its competitive position," the ratings agency said.
Stephen Beatty, managing director of Toyota Canada Inc., said Canadian dealers should be able to repair all 270,000 vehicles affected by the accelerator pedal recall in a month.
"The important thing beyond [the]apology is to make sure that our customers understand that we know what the problem is," Mr. Beatty told reporters yesterday after a presentation to the C.D. Howe Institute.
With files from Bloomberg and Associated Press