Mon, February 08, 2010
Business > Industries > Toyota's global massive recalls

Toyota admits Prius brake flaw, sees 2 bln losses

2010-02-05 02:56:52 GMT2010-02-05 10:56:52 (Beijing Time)  Xinhua English

This photo taken on Feb. 4, 2009 at an exhibition hall in Japan's capital Tokyo shows a Toyota Prius hybrid. Toyota Motor Corp. spokeswoman Ririko Takeuchi said Thursday that Toyota discovered there were design problems with the antilock brake system and corrected them for Prius models sold since late January, including those being shipped overseas. (Xinhua/AFP photo)

BEIJING, Feb. 5 -- Toyota admitted Thursday a brake design flaw in its Prius hybrid, dealing a new blow to the world's top carmaker that is already facing a $2 billion loss from massive safety recalls.

The brake trouble comes on top of accelerator-pedal problems that have now spread to Britain and raised fresh questions about whether Toyota sacrificed quality in its drive to overtake General Motors as global No. 1.

The company said it had redesigned the anti-lock braking system ā€“ designed to prevent skidding ā€“ for the latest version of its Prius produced since last month, and the company plans to announce steps soon for those already on the road.

At a hastily scheduled news conference, Toyota said it would unveil safety measures relating to the Prius brakes, while denying that it had dragged its feet on revealing the problem, and saying the initial reports of trouble were only received late last year when icy conditions in Japan and North America contributed to the problem.

The flaw could hardly have come at a worse time, as the Japanese giant is deeply mired in handling the massive recalls affecting about 8 million vehicles worldwide due to the accelerator issues.

The combined recall costs and lost sales are expected to slash profits by up to about 180 billion yen ($2 billion) in the current financial year through March, the company said amid much criticism in the US.

The US National Highway Traffic Safety Administration declared Thursday it would "look into allegations of momentary loss of braking capability" of the Prius hybrid.

The probe came after US Transportation Secretary Ray LaHood talked about the safety of Toyota vehicles with the carmaker's president late Wednesday, an unusual step set to emphasize how seriously the administration is taking the investigations.

Toyota shares in Tokyo slid 3.5 percent Thursday to a 10-month closing low of 3,280 yen ($36.14).

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