If recalls were horse races, Toyota Motor (TM) could be described as going for a trifecta. The world's largest automaker appears likely to announce a recall as soon as Tuesday of at least 311,000 2010 Priuses, after owners reported having difficulty stopping on slippery and bumpy roads. The latest action will follow two massive recalls of 8 million Toyota models for unintended acceleration. Unlike the issues which led to the previous recalls, which were mechanical in nature, the problem with the Prius is apparently a software issue.UPDATE: Toyota is readying plans to begin the recall of more than 270,000 Prius vehicles in U.S. and Japan, the Kyodo news agency reported late Monday Tokyo time, citing an unidentified source. Toyota spokeswoman Ririko Takeuchi said no decision on a Prius recall has been made, The Press Association reported.
A recall of the iconic Prius would only further erode the car maker's withering image for quality and safety. The gas-electric hybrid, the most popular car of its kind, has been emblematic of Toyota's reputation for cutting-edge technology. The Prius brand has been so successful that Toyota is planning a broader line of Prius vehicles beyond the lone four-door hatchback model now sold.
Speaking Sunday, a Toyota spokesman told The Wall Street Journal only that the company was continuing to study the problem and declined to comment about any possible responses. As of Sunday, the National Highway Traffic Safety Administration hadn't received word from Toyota about a recall or possible fix for the problem for Priuses currently on the road, the Journal said. However, Toyota rewrote the software used by the braking system late last month; all models manufactured since then utilize the updated program.
Commenting on news reports Sunday that the company had already decided to issue a recall in Japan, Toyota spokeswoman Ririko Takeuchi told the Associated Press, "We will make an announcement soon on the action we plan to take," She didn't confirm the reports.
The news agency also reported that Toyota has informed its dealer network in the U.S. that it is readying plans for repair of Prius braking systems, according to an email sent by a Toyota executive. Still, it remains unclear whether a formal recall will be issued.
At a hastily called press conference late Friday in Tokyo, Toyota President Akio Toyoda apologized for the recent spate of recalls and acknowledged that the Prius had brake problems. Toyoda, grandson of the company's founder, promised to set up a special committee, which he would head himself, to monitor and boost quality. Toyoda has faced criticism for his seeming absence amid the crisis, the worst since the company's founding in 1937. He pledged to work with U.S. authorities investigating the problem.
The NHTSA has received 124 complaints about the Prius's anti-lock braking system, which has been blamed in four crashes. The braking problem doesn't exist in prior-year Priuses. For the 2010 model, Toyota updated the Prius's regenerative braking system, which uses energy created in braking to aid in recharging the on-board batteries and increase full-efficiency. The cars also have standard brakes; the sensation of inadequate stopping power is created when the Prius transitions from one braking system to the other.
In addition to taking toll on Toyota's corporate image, the spate of recalls has put a dent in the company's share price. After rising in Tokyo trading Monday, shares fell 1.1% to 3,280 yen. In New York, the stock was lower by nearly 2% in morning trading. The stock has lost about 15% of its value in the last 30 days, prior to Toyota's announcement of a recall of 2.3 million cars in the U.S. for unintended acceleration caused by "sticky" accelerators.
Understanding Stock Market Indexes
What does it mean when people say "the market is up 2%"?View Course »