A second recall of Toyota’s top-selling Corolla in the United States, this time potentially to address complaints about the steering, would cost very little on paper but risks further damaging its brand, a Japanese analyst said.
US regulators last night launched a preliminary probe into reported steering problems with the Corolla, Toyota’s second-most popular vehicle in the important US market behind the Camry sedan. Both are built in North America with a high percentage of locally sourced parts.
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Preliminary investigations are a common step by regulators and are often closed without leading to a recall, Reuters noted.
Toyota told the news agency it was eyeing complaints about steering in 2009 and 2010 Corolla models, of which some 550,000 have been sold in North America, but that it would only recall the cars if the issue was deemed a safety risk.
Analysts and investors are worried about the damage renewed scrutiny of the Corolla, which is already subject to a recall for an accelerator pedal defect announced less than a month ago, could do to Toyota’s brand and sales.
“Another recall of the Corolla may cost only JPY5bn to JPY6bn (US$55m to $66m). But the Corolla is synonymous with the Toyota name,” Koji Endo, an auto analyst at Advanced Research Japan, told the news agency.
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By GlobalData“Recalling the flagship model over and over again could damage Toyota’s brand. I am afraid its customers might leave for rival cars.”
Toyota’s quality chief, Shinichi Sasaki, said at a briefing in Tokyo on Wednesday that internal studies had shown that drivers had complained about a change in steering response compared with older Corollas, possibly due to a switch from hydraulic to electric power steering.
He also said that it was not yet clear if the problem was due to the steering, tyres or another part. One US media report said about 100 Corolla owners had complained about the steering suddenly veering to one side.
Toyota recalled 2.3m vehicles, including the 2009 and 2010 Corolla models, in the US to fix potentially ‘sticky’ accelerator pedals in late January and has made a similar recall here in Europe. It has repaired about 500,000 cars in the US alone so far, a Tokyo-based Toyota spokesman told Reuters.
So far the power steering problem appears contained to the United States. Japan’s transport ministry said there had been no complaints reported about the Corolla’s steering system in Japan, adding that the model sold there used different parts.
Toyota’s Australian and New Zealand units said separately that also applied to Corollas sold ‘down under’ after Toyota officials in Japan told them that the electric power steering system used in the Corollas sold in both countries was different from that fitted in the US.
Toyota New Zealand’s Paul Carroll told local media there were no reports of power steering problems in Kiwi Corollas, which are made in Japan, while those sold in the US were made in North America.
“There is no reason for any Corolla customer in New Zealand to be concerned at this stage,” said Carroll.
“The customer reports in the US are being investigated by Toyota Japan and we will advise our customers immediately should there be action necessary here.”
