TOKYO – Toyota Motor Corp., under fire from fresh quality complaints about its popular Prius hybrid, says it conducted a software fix to address reports of slipping brakes.

But the world’s biggest carmaker didn’t notify customers at the time of the change. And it says it is still uncertain how to handle the thousands of Prius vehicles that were sold before the fix.

The problem occurs in the third-generation Prius, which went on sale in the United States, Japan and Europe last year. Transportation agencies in the United States and Japan have been compiling dozens of complaints that the car’s brakes give way under certain conditions.

Japan’s Ministry of Transportation has ordered Toyota to investigate the problem and consider a recall if a defect is found. The ministry has logged 38 complaints since July. Read more…

WASHINGTON - In the latest in an escalating string of safety problems, Toyota plans to recall 270,000 of its  popular Prius hybrid in the United States and Japan over a braking issue, the Nikkei News Service reported.

A spokesman at Toyota’s U.S. sales division said he had no information to confirm the report from Japan.

“We have no information on any decision to recall the Prius,” said John Hanson, a Toyota spokesman at the company’s U.S. sales arm in Torrance, Calif. He said the company is working with the National Highway Traffic Safety Administration on a preliminary evaluation of the problem.

Read more…

WASHINGTON (Reuters) - A two-front U.S. government investigation of unintended acceleration in Toyota Motor Co (7203.T) vehicles intensified on Tuesday, despite the automaker’s belief that it has solved the problem.

“We’re not finished with Toyota,” Transportation Secretary Ray LaHood said in an e-mailed statement to Reuters about the response by the Japanese automaker and the government to consumer complaints that led to two recalls of 5.6 million cars and trucks in the United States in 2009 and in January.

LaHood’s comments referred to renewed efforts at the National Highway Traffic Safety Administration (NHTSA) to recheck files from past investigations that found no problems with Toyota’s electronic throttle control system. That technology was introduced more widely in the automaker’s products several years ago.
Toyota said it would cooperate fully with the NHTSA investigation. Read more…

General Motors of Canada posted strong retail sales performance for its four core brands - Chevrolet, Buick, GMC and Cadillac - which increased 29% in January, outpacing the industry average and reflecting strong customer acceptance for the company’s newest vehicles.

“Our strengthened product and brand focus and leading dealership sales and service experience are clearly resonating with Canadian customers,” said Marc Comeau, GM of Canada’s vice-president of sales, service and marketing. “We are very pleased with this solid start to 2010, which was driven by impressive gains for our line-up of fuel-efficient small cars, with Chevy car sales up more than 48%.”

Comeau added, “In addition, the Canadian-built Chevrolet Equinox and GMC Terrain compact cross-overs continued to hit the mark with customers, up a combined 81 percent, as did our award-winning family of fuel-efficient mid-size cross-overs - the Chevrolet Traverse, GMC Acadia, and Buick Enclave which were up a combined 65 percent. And Cadillac continues to be a great success story in the luxury segment with sales up 56 percent, led by the all-new 2010 Cadillac SRX.” Read more…

Despite the marketing rhetoric, the automotive industry is a place of evolutionary not revolutionary change. The upheaval that alternative fuel strategies are causing notwithstanding, vehicle redesigns tend to be about a few millimetres here, a tuck there and a horsepower or litre per 100 kilometres improved. It is the nature of the business, with radical leaps forward punished as often as they are rewarded.

So, the second-generation Cadillac SRX breaks the mould not for any radical technology but quite literally for completely abandoning whatever market niche its predecessor was attempting to play in for a more traditional segment occupied by the Audi Q5, Mercedes GLK and BMW X3.

Where the previous SRX tried to be all things to all people, offering seven seats to accommodate the minivan crowd, a V8 to please the performance-oriented and avant-garde styling for the trendy, the new model is much more focused. Sure, it’s still wrapped up in the latest Art & Science, sharp-edged Cadillac garb, but the new SRX makes do with six cylinders and five seats, both typical of the mid-sized luxury sport-ute. Read more…

by John Neff

TheDetroitBureau.com is reporting that Toyota is currently in discussions with other world governments and safety agencies about expanding its latest recall involving defective accelerator pedal mechanisms that may cause unintended acceleration. Eight models are included in the current U.S. recall, which affects some 2.3 million Toyota branded vehicles. Without a fix for the issue, Toyota is required by law to stop production and sales of the vehicles, which it did yesterday – some five days after the recall was announced. Toyota also announced another recall earlier this month affecting 4.2 million vehicles with floor mats that could trap accelerator pedals, also causing unintended acceleration, and while the two issues are said to be unrelated, around 1.7 million vehicles are affected by both recalls.

At the heart of this latest recall are accelerator pedal mechanisms produced by Indiana-based CTS Corp. at its plant in Mississauga, Ontario. What’s not immediately known is whether the pedal mechanisms produced by CTS Corp. have been used in any models sold outside North America, or whether the problem with these parts is in their manufacturing or an issue with their design, choice of materials, etc. If it’s the latter, the defective pedal mechanisms could be produced in other Toyota supplier plants around the world and be used in millions more vehicles than the ones covered by this latest recall in the U.S.

Toyota has not officially commented whether or not its considering expanding the recall to other markets, or other brands like Lexus and Scion. Stay tuned as more news about Toyota and its recall woes continues to surface.

by John Neff

Toyota has quite the PR nightmare on its hands. The boiling cauldron of complaints surrounding unintended acceleration issues bubbled over this month with two separate but giant recalls. The latest involves eight Toyota models that contain defective accelerator pedal mechanisms that could stick over time due to wear.

There is no fix available for the pedal mechanisms yet and dealers have continued to sell new models affected by the recall, so Toyota announced yesterday that it’s suspending the sale and production of these eight models for the week of February 1. It was a bold move that made headlines, as Toyota stands to lose a lot of money. On the other hand, the Japanese automaker got some pats on the back for doing the right thing.

Turns out, the decision to stop producing these vehicles wasn’t made by Toyota alone. The Detroit News reports that Toyota is required by law to stop selling the vehicles since there is no fix available yet. David Strickland, the new administrator of the National Highway Traffic Safety Administration, said that Toyota consulted with his agency, which informed the automaker of its obligations and it complied. That still doesn’t answer why these recalled vehicles were being sold five days after the recall was announced.

Nevertheless, Toyota spokesman Mike Michels is reported saying that the company’s decision to stop selling the recalled vehicles was voluntary, but that they also had a legal requirement to do so. How do you voluntary do something that you’re obligated to do?

In related news, General Motors has confirmed to Autoblog’s sister site, AOL Autos, that it is putting a hold on all remaining Pontiac Vibe sales, as the model is under recall for the same throttle issue that afflicts its mechanical twin, the Toyota Matrix. Fortunately for GM, there are apparently only six Vibe units left in stock nationwide as the brand’s shutdown continues.

An area about the Volt that remains unknown is exactly how GM plans to roll out the car.

So far there have been announcements about California, Michigan, and Washington DC being initial markets, but the exact timing of showroom arrivals isn’t clear.  GM executives over the years have generally stuck to the premise that the cars will gradually and sequentially be rolled out state by state  throughout the nation albeit quickly.

I recently had the chance to go straight to the top and ask GM’s new  CEO Ed Whitacre the question that always nags at me, why not release the car throughout the nation simultaneously?

“Our plan is to introduce it everywhere simultaneously,” he said.

He cautioned that volumes will be low.  ”We’re not going to have a great number of them,” he added.

GM expects to produce about 10,000 Volts the first year.

Whitacre also said there are plans to get some Volts in the market prior to November 2010.

“We’re going to have a few out early,” said Whitacre.  ”We’re in the testing stage now,where its pretty much done.”

He explained how GM’s board offered significant funding to see how soon the car could be laucnhed.

“I did ask them ‘If I gave you another billion dollars could you get it out sooner?” he said. “They said no because its all about testing.”

“Its being tested in the desert and the artic now, the timeframe is dependent on testing,” he added.

And finally Mr. Whitacre told me something about the early Volts that was a gift beyond my wildest dreams.

“I’ll put you on the list to get one,” he promised.

Booya!!!

In the first IPO of an automaker since Ford went public in 1956, Telsa Motors has filed with the SEC an application to sell shares to the public and become a publicly traded company.

This is seen as a victory of sorts for the Silicon Valley start-up company that has been plagued with difficulties, controversies and delays. It is another landmark on the path to electrification of the automobile for the company that Bob Lutz admits inspired the Volt concept. Its CEO Elon Musk, billionaire founder of PayPal is not one to give up, and he has been pushing for this event for some time.

The timing of the IPO is not specified but is expected to raise $100 million dollar or more for the sale of shares.  Telsa has already received $465 million in goverment loans for the building of its Model S sedan assembly plant and a powertrain plant.

In the filing Tesla, has indicated it has sold 937 Roadsters for $109,000 each.  In the first three quarters of last year the company lost $31 million on revenue of $93 million.

The company warns that revenue is likely to become lower until 2012 when the Model S Pure EV goes into production.  The car was initially projected to go on sale in 2011, but was moved back. There are 2000 people who have put down $5000 deposits for it. Tesla will also acutally be ending the production of its current 2-seat Roadster in 2011, for which there are only 220 more backorders. A replacement isn’t due until 2013.

The filing also contains an easter-egg of sorts for current Tesla owners.  They will be considered “friends and family” of Tesla which means they will be permitted the option of purchasing shares of the company at its inital price prior to entering the secondary public market. This is a way for Tesla to extend their appreciation to their loyal early customers.

This year is also expected to potentially bring the IPO of the new GM.

Risks or rewards.  Will you buy these companies’ shares?

(Read Prospectus)

What a difference a year makes. The domestic auto industry (forgetting Fiatsler for a moment) is seemingly firing on all cylinders, while Toyota and Honda are hitting road bump after road bump. Which begs the question, can GM take advantage?

For years a trip to the doctor or dentist’s office meant the forced perusal of endless stacks of historical Consumer Reports magazines (unless you really fancied reading May 2006 Issue of Soap Opera Digest). This also meant you were generally treated to a glowing report on Toyota’s latest people mover (unless you were talking about the Tundra), which was usally summed up by a comparison to a similar, but ultimately unfavorable product from Detroit.

To be fair, a good bulk of the criticism was well deserved, but most would agree that the gap has narrowed significantly over time as Toyota has struggled with pressure of being both the number one manufacturer in the world and holding onto the crown for quality and reliability.

Very often public perception is a market-trailing result, gained from a historical experience with a product and does not accurately reflect today’s reality. It takes time for sentiment to change, and in the auto business that can be a very, very long time. A fact GM knows all too well…but sometimes a perfect storm of events lead to things changing in a hurry.

Enter a nationally focused recall and production shut down at Toyota, coupled with a resurgent Detroit auto manufacturing base, and you have some real momentum to change the public’s mind.

Toyota has been dogged by claims of a stuck accelerator pedal for months leading up to this week; at first they claimed it really wasn’t a big deal, didn’t exist, that no real accidents of any significance had occurred, and that maybe it was just floor mat in the end…basically they did whatever they could do to contain the damage.

However, the floodgates opened when the National Highway Traffic Safety Administration got involved and claims started coming to the surface on hundreds of accidents. Eventually, millions of cars were recalled, and contrary to what Toyota would have you believe, they were federally mandated to stop production on 8 models until a fix was submitted and approved by the NHTSA.

Throwing even more gasoline on the fire, we now have a House panel holding a hearing at the end of next month, requesting documents from the automaker and the NHTSA about everything they know on it, referencing “persistent consumer complaints of sudden unintended acceleration,” all but guaranteeing the issue stays at the forefront of the news.

When you start hearing statements from the Energy and Commerce Committee Chairman Henry Waxman like, “I am concerned by the seriousness and scope of Toyota’s recent recall announcements…our hearing will help us better understand how quickly and effectively Toyota and the NHTSA responded to consumer complaints about the safety of the recalled Toyota vehicles,” you know it has gone past the point of no return.

These 8 production halted models at Toyota account for roughly 6 out of every 10 vehicles sold by the Japanese automaker…which means if you have bought a Toyota car in the last half decade or so, the thought of involuntarily charging into traffic has, at the very least, crossed your mind…and that is not a good thing for Toyota. The only thing worse for Toyota would have been if the recall/stop work order included their flagship Prius…or if Michael Phelps was in a head on collision in one and could never swim for the US again.

Has the focus and criticism of Toyota gotten out of control? Yes. Is it fair to Toyota and the image they have worked so hard to gain over the past couple decades? Probably not. But that is the way it is…and that is the business reality that GM knows all too well of late.

Couple the hit Toyota has taken on its image, with the massive loss they took last year fiscally, along with its gloomy forecast for the coming year and put it up against Detroit’s new found renaissance and you would think it was Toyota that was in trouble.

Conversely, GM now has a clean balance sheet, a forecast of profitability, and potentially a car in the Volt that could steal the thunder from the leader of ‘all things green’ in the Prius. While, the other half of the Detroit equation (Ford) also just finished reporting a 2.7 billion dollar profit for 2009, increased market share, and had a fantastic 4th quarter. (although don’t look behind the curtain too much at that gross negative cash flow, or 1.3B loss from automotive operations…but I digress)

Toyota’s Japanese counterpart Honda has had its own share of troubles. On Friday it announced the recall of some 600,000 cars and has been soundly panned for its abysmal attempt in the strong hybrid market with the Insight (I myself walked from a $500 deposit at my local dealer when specifics/reviews on the car began coming to light). Not to mention introducing what I feel is the ugliest car of the new millennium, the Crosstour. (what the heck is that thing anyway?) Lets just say the new Civic can’t come soon enough for them, and leave it at that.

By no means is General Motor’s all the way back, and I don’t expect to see them atop all the JD Power ratings next year, or even on the cover of Consumers Reports the next time I sit down at my dentist’s office, but they have come along way in a short time.

How has GM reacted to the touble at Toyota? Well…while Toyota has been in a production shutdown, they have been adding salt to the wound by offering (albeit on the ‘down-low’) an additional $1,000 to any current Toyota owner to make the switch…on top of the (on average) $4,000+ in incentives already in play.

/twist the knife GM…twist the knife

Sidenote: It is reported that Toyota believes they have a solution for the gas pedal problem; a small spacer that would increase tension on the accelerator and (hopefully) cause it to not remain in a depressed position. Due to the NHTSA’s involvement, it must first be approved by them before production will resume.