Toyota Prius Still No.1 in Japan

Shoppers examine a Prius in a Toyota showroom in TokyoThe Transportation Department may be seeking to fine Toyota (TM) $16.4 million for "failing to notify the auto safety agency of the dangerous 'sticky pedal' defect for at least four months, despite knowing of the potential risk to consumers," but Japanese consumers don't seem to care. After all the bad PR from the recall of 8.8 million vehicles worldwide, in March, Toyota's Prius was the No.1 selling car in Japan for the 11th month in a row, according to the AP. The the Japan Automobile Dealers Association said that 35,546 units of the Prius were sold in Japan last month.Why does the Prius continue to do so well in Toyota's home market? Part of the answer is that many Japanese believe that Toyota has been unfairly singled out by the U.S. Transportation Department. GM, Ford (F), and Chrysler have been forced to recall millions of cars over the last decade. Just last year, GM had to fix 1.5 million cars that had leaky engines that could potentially cause car fires and Ford had severe roll-over problems with its Explorer in 1999. Many of the liability cases against the American car firm were not settled until nearly a decade after the problem was discovered.

While Japanese nationalism may be part of the reason the Prius has done so well, another advantage the hybrid has is the cost of gasoline on the island nation. Recently the price per gallon there topped $5.40. The Prius and Honda's (HMC) fuel-efficient FIT probably sell well because they get such impressive mile-per-gallon ratings.

Ultimately the Prius may continue to sell for just that reason. In a world where consumers are worried that oil prices are high, and may keep rising, the ability to save money and Toyota's brand, tarnished, but apparently still strong, may trump concerns about a rash of recalls that appear to be over.

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