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The Toyota logo is lit up above Boch Toyota's dealership in Norwood, Mass. (BRIAN SNYDER/BRIAN SNYDER/REUTERS)
The Toyota logo is lit up above Boch Toyota's dealership in Norwood, Mass. (BRIAN SNYDER/BRIAN SNYDER/REUTERS)

U.S. to broaden probe of Toyota's vehicles Add to ...

Fresh trouble has emerged for Toyota Motor Corp. as the auto maker faced the wrath of the U.S. government and reported a sales slump in Canada and the United States after it halted deliveries of its most popular vehicles.

Washington said Tuesday that it will consider civil penalties and broaden its investigation into the causes of the potential sudden acceleration in millions of vehicles.

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"We're not finished with Toyota and are continuing to review possible defects and monitor the implementation of the recalls," U.S. Transportation Secretary Ray LaHood warned in a statement.

The double dose of bad news came one day after Toyota began moving to try to put the recall of 2.3 million vehicles and a freeze on the sale of its most popular cars in the two countries behind it. The embattled company launched a public relations blitz and announced that it will begin fixing sticky accelerator pedals later this week.

But the comments by Mr. Lahood, the possibility of government penalties and pending hearings by the U.S. Congress into the matter indicate that the troubles for Toyota will linger.

The U.S. government, Mr. Lahood said, had to alert Toyota to the safety issues, calling it "a little safety deaf."

In contrast, Transport Canada said it received no complaints from consumers about sticky pedals and did not act until Toyota Canada Inc. informed Ottawa on Jan. 21 that it was issuing a recall.

"This was first time that Transport Canada became aware of this specific sticky pedal issue," said James Kusie, a spokesman for Transport Minister John Baird. Transport Canada officials met immediately with Toyota to discuss the problem and Toyota's plan to fix it, Mr. Kusie said.

Eight days later, on Jan. 29, Toyota submitted to Transport Canada its plan to remedy the sticky pedal problem. The small Defects and Recalls unit inside Transport Canada often relies on consumer complaints and information from its U.S. counterpart to monitor the auto industry.

The U.S. government said it will broaden its examination to include the electronic-throttle control system in Toyota vehicles, which several U.S. lawsuits allege is the source of sudden acceleration that has led to two massive recalls by Toyota, but which the company denies. One recall is to eliminate the impact floor mats might cause in trapping gas pedals and the other is to insert a tiny piece of steel into some pedals to make sure they don't stick.

Mr. LaHood told the Associated Press that the government is considering civil penalties, but did not elaborate. Toyota responded saying that "nothing is more important to us than the safety and reliability of the vehicles our customers drive. Secretary LaHood said to us that the soonest possible action would be in the best interests of our customers, and we took his advice very seriously and instituted a recall."

Toyota's sales slid 10 per cent in Canada and 16 per cent in the U.S. market in January amid the sales halt and a week-long burst of negative publicity surrounding the recall of Corolla, Camry, RAV4, Matrix, Avalon and other models. Pontiac Vibe models made at Toyota-GM joint venture assembly plant are also affected.

More troublesome for the industry as a whole, however, was the tepid bounce back from the poor sales of January, 2009, which was one of the worst months in a dreadful year for auto makers.

The seasonally adjusted selling rates in both countries were lower than those in December and not sharply higher than the January, 2009, levels.

"We expected better numbers," said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ont.

Nonetheless, GM declared that economic fundamentals are improving in the U.S. and raised its sales forecast for the overall U.S. market to 11.2 million to 11.7 million, versus a previous forecast of between 11 million and 12 million.

U.S. sales would have hit that 11.2 million level last month but for the Toyota freeze chilling the entire U.S. market, officials from both GM and Ford Motor Co. said.

GM pegged the U.S. level at 11 million. Ford estimated it at 10.7 million. The U.S. rate was 9.8 million in January, 2009.

In Canada, sales rose 6 per cent from year-earlier levels that were the worst in a decade.

Toyota Canada Inc. and Honda Canada Inc. posted the worst performances among the big companies.

Chrysler Canada, Ford Motor Co. of Canada and GM Canada all reported higher sales but were outshone by torrid months reported by Hyundai Auto Canada, Subaru Canada and several luxury brands.

Hyundai's 32-per-cent surge to 6,084 sales carried it to within a few hundred vehicles of Honda and gained it 1.5 percentage points of market share. Audi Canada, Kia Canada, Mercedes-Benz Canada, Nissan Canada and Subaru each gained more than half a point of share.

Senior U.S. executives with Ford and GM played down the impact that worries among Toyota drivers might have had on their own sales.

"I don't think they made decisive moves from one day to another," Ken Czubay, vice-president of U.S. marketing sales and service for Ford Motor Co. said.

Ford picked up as much as 2.5 points of market share to 16 per cent of the U.S. market, but George Pipas, Ford's chief U.S. sales analyst, said there was no evidence that Ford won over any extra Toyota drivers.

Mr. Czubay noted that people shopping for Toyotas generally compare them first against Honda vehicles.

GM officials said their data show that a Toyota buyer will consider GM vehicles as a second choice 5 to 10 per cent of the time.

Toyota officials acknowledged that the halt in sales hurt the company's business in January.

"There is no doubt that the stop sale which was put in place last week impacted our sales," said Bob Carter, group vice president and general manager of Toyota Motor Sales USA.

With files from Associated Press



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