Toyota Motor's (TM) once-bulletproof reputation is taking another hit on reports that the Japanese automaker could expand a recent recall of U.S. vehicles to include some models sold in Europe. Toyota announced last week it would recall 2.3 million cars in the U.S. to fix problems with unintended acceleration caused by faulty parts from a specific supplier."The company is considering whether to recall vehicles in Europe due to similar defects with the accelerators that we encountered in the United States," a Toyota spokeswoman told AFP. Certain models sold in Europe, such as the RAV4 and Corolla, used the same parts that have caused problems with sticking accelerators in U.S. models.
The list of models also includes cars from Toyota's luxury brand, Lexus, and one U.S. make, the Pontiac Vibe, which was manufactured at a plant jointly operated by General Motors and Toyota in Fremont, Calif., according to Autoblog.
GM doesn't yet know the how many of the 2009-2010 Vibe models are involved, Autoblog said. When details emerge, GM will notify affected customers and request that they bring their vehicles in for service at Buick-GMC dealerships, since Pontiac dealerships have all but disappeared following GM's decision last year to shutter the brand.
Toyota's Loss Could Be Ford's Gain
Should Toyota expand the recall to Europe, it would nearly double the number of cars involved, hiking the total cost of the repairs by hundreds of millions of dollars. Shares of Toyota were trading slightly lower in New York, at around $87.60 a share near midday.
News of problems with unintended acceleration in Toyota and Lexus vehicles first surfaced in September. At the time, the company blamed jammed floor mats for the problem, which had resulted in at least 30 crashes and 20 injuries.
Unknown so far is what affect the widening recall will have on Toyota's sales. In the U.S., Toyota has a market share of about 18%, second only to GM, and just ahead of Ford (F).
Dearborn, Mich.-based Ford has been on a tear recently, receiving accolades from both the automotive press and consumers for well-made, innovative cars. And unlike GM and Chrysler, which received government bailout money to stay afloat, Ford has managed to revive its fortunes without Uncle Sam's intervention.
Should Toyota's image be irreparably harmed by the recall, Ford would likely be one of the primary beneficiaries; its reputation lately is beginning to resemble that of Toyota just a few years ago.
Improve your investing savvy with the right financial toolset.View Course »