Toyota Recalls 7M Vehicles Over Faulty Windows

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DETROIT (AP)
— The largest recall in Toyota's 75-year history could undermine the
carmaker's comeback from natural disasters and embarrassing safety
problems.

The company on Wednesday recalled
7.43 million cars, trucks and SUVs worldwide to fix faulty power window
switches that can cause fires. The recall affects more than a dozen
models produced from 2005 through 2010 around the world including the
Camry, the top-selling car in the U.S. It's bigger than the 7 million
vehicles recalled two years ago for floor mats that can trap accelerator
pedals and cause unintended acceleration.

The
problem centers on the power window switch, which is inside the
driver's door and controls when a window is opened or closed. Toyota
said grease wasn't applied evenly to the switch during production,
causing friction and sometimes smoke and fire.

The
flaw raises questions about whether Toyota Motor Corp. has solved
quality and safety issues that embarrassed the company in 2009 and 2010.
It also could jeopardize Toyota's impressive rebound from last year's
earthquake and tsunami in Japan. Those disasters hobbled factories and
left dealers short of models to sell.

The
Toyota recall “takes some of the sheen off its recovering brand image
and should have a financial impact,” Standard & Poor's analyst
Efraim Levy wrote in a note to investors. Toyota's U.S. shares fell
$1.60, or 2.1 percent, to $74.46 Wednesday afternoon.

Toyota
said initially the window switch problem hasn't caused any crashes or
injuries. But documents filed by U.S. safety regulators show customers
have reported 161 fires and nine injuries. No deaths have occurred.

The
U.S. National Highway Traffic Safety Administration began looking into
window switch problems with two Toyota models in February after noticing
a higher than normal number of complaints. Most fires caused by the
window switch were minor, although a Camry was destroyed in one case.
Several owners reported that they were afraid to drive their vehicles
because of the threat of fires. NHTSA said Wednesday the investigation
remains open pending a review of recall documents.

Toyota
said Wednesday it has received more than 200 complaints about the
switches in the U.S., and more from other countries including 39 in
Japan. Most of the complaints were about a sticky feel to the switches
while pushing the button to move the window up or down, but there also
were complaints of the smell of smoke, company spokesman John Hanson
said.

Toyota dealers will inspect the switches
and apply a special grease to them. In some cases the switches and
circuit boards could be replaced, Hanson said. Some repair shops might
have used off-the-shelf greases to fix the problem, but those eventually
will make it worse, he said.

The recall
includes 2.5 million vehicles in the U.S., where it covers about half
the models sold under the Toyota and Scion brands.

Recalled
U.S. models include the 2007 to 2009 Camry, Tundra pickup and RAV4
small SUV; the 2007 and 2008 Yaris subcompact; the 2008 and 2009 Sequoia
large SUV and Scion xD and xA small cars; the 2008 Highlander SUV; and
the 2009 Corolla and Matrix compacts.

Hanson
said he was not sure if the recall will hurt Toyota's sales, which have
come roaring back in the U.S. after production recovered from the
earthquake.

Through September, Toyota sales
were up nearly 32 percent compared with a year earlier, more than double
the growth of the U.S. industry. Toyota also reclaimed the title of the
world's top-selling automaker during the first half of this year,
wresting the crown from General Motors Co. Toyota sold 4.97 million
vehicles globally in the first half, beating GM by about 300,000.

Analysts
said it's too early to tell whether such a large recall will hurt
Toyota's sales. S&P's Levy, who downgraded Toyota stock from “Buy”
to “Hold,” wrote that he hasn't quantified the financial impact.

If
Toyota makes its customers feel like they are being cared for properly
as the repairs are done, there probably won't be much of an impact, said
Mike Jackson, director of North American production forecasting for IHS
Automotive, an industry consulting firm.

“There's
a tremendous amount of loyalty to the Toyota brand,” he said.
“Certainly it's not going to be the primary point of consideration for
most consumers out there.”

The window switch
recall also highlights one of the risks of globalized car production:
Automakers install the same parts on multiple models in different
counties, saving money but exposing their lineups to big recalls if a
part is flawed.

Toyota said it quickly
identified all the models using the problem switches and took action.
“We want to make sure that we addressed this issue quickly and
effectively, and I think we are doing that with this recall,” Hanson
said.

The recall covers only the master power
window switch on the driver's side, which controls all four windows.
Switches inside the other doors are different, Toyota said.

Before
the safety recalls two years ago, Toyota had a reputation for pristine
quality, centered around its super-lean production methods that
empowered workers to hone in on quality control. Toyota executives have
acknowledged the escalating recalls were partly caused by the company's
overly ambitious growth goals.

Toyota is also
suffering from a sales plunge in China where car buyers are shunning
Japanese brands because of a territorial dispute over islands claimed by
Japan, China and Taiwan.

Copyright 2012 by The Associated Press. All rights reserved.

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