Toyota May Recall Corolla After U.S. Investigation (Update3)

Feb. 18 (Bloomberg) -- Toyota Motor Corp. may add the Corolla, the world’s top-selling car, to a record recall list as U.S. regulators begin investigating the vehicle on reports of 11 injuries tied to a suspected power-steering flaw.
A National Highway Traffic Safety Administration inquiry opened today will cover about 500,000 vehicles from model years 2009 and 2010. Toyota is reviewing the Corolla’s steering and will recall the car if there is a safety issue, Executive Vice President Shinichi Sasaki said yesterday.
Toyota is already recalling more than 8 million vehicles on five continents spanning models from the Camry sedan to the Prius hybrid for brakes and accelerator pedals. The world’s largest carmaker has lost more than $31 billion in market value since announcing fixes for the pedal defects on Jan. 21.
“Toyota’s troubles are going to continue for a while,” said Mamoru Kato, an analyst at Tokai Tokyo Research Center in Nagoya, Japan. “Customer complaints will just snowball because they are related to driver perceptions.”
Toyota fell 0.6 percent to close at 3,360 yen in Tokyo. The company’s American depositary receipts, each representing two ordinary shares, declined 71 cents to $73.44 at 4:15 p.m. in New York Stock Exchange composite trading.
NHTSA, which regulates auto safety, said in a posting on its Web site that it has received 168 complaints from Corolla owners about steering “becoming unresponsive or loose while driving at highway speeds.” The agency said it had reports of eight crashes and 11 injuries, and is opening the preliminary evaluation to assess the alleged defect.
‘Cooperate Fully’
“We are aware of complaints regarding 2009 and 2010 Corolla steering systems, are investigating the issue and will cooperate fully,” with NHTSA’s investigation, Cindy Knight, a Toyota spokeswoman, said in an e-mail.
President Akio Toyoda said yesterday the company is making progress addressing the recalls, and that dealers in Japan will have fixed as much of 80 percent of Priuses by the end of February.
Toyoda said he plans to skip testifying before the U.S. Congress about the company’s recalls and hasn’t decided on his schedule for a U.S. visit. North American President Yoshimi Inaba will attend hearings in Washington next week, Toyoda said. Toyota’s U.S. sales unit president Jim Lentz will testify at the first U.S. house hearing on the recalls, according to the company.
‘Dangerous Situation’
White House press secretary Robert Gibbs, asked whether Toyota’s president should testify before Congress, said the Obama administration hopes Toyota will do all it can to rectify this “dangerous situation.”
“Everybody I think is rightly concerned about the recalls that have happened,” Gibbs told reporters aboard Air Force One as Obama traveled to a political event in Colorado.
The U.S. is traditionally the automaker’s most profitable market. Toyota placed advertisements in Japanese newspapers yesterday apologizing and promising to complete repairs as soon as possible.
The automaker has set up a global quality committee, headed by Toyoda, and will appoint a chief quality officer for each of the company’s regions, Toyoda said yesterday. The committee will have its first meeting on March 30, he said. The company will appoint a third party to test its electronic throttle system.
To contact the reporters on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net; Kiyori Ueno in Tokyo at kueno2@bloomberg.net