Toyota hit by Prius flaw, mounting recall bill

Toyota said yesterday there was a brake design flaw with its Prius hybrid, in a major new blow to the world's top automaker, already facing a $2billion bill 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 number one.

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

At a hastily scheduled news conference, Toyota said it would soon unveil safety measures relating to the Prius brakes.

"We'll make an announcement before long," said Hiroyuki Yokoyama, a Toyota official in charge of quality control. "The brakes are slow but if you continue to step on them, the car will stop."

Toyota denied it had dragged its feet on revealing the problem, 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 for the Japanese giant.

Toyota is under fire in the United States for its handling of massive recalls affecting about eight million vehicles worldwide - more than its entire 2009 global sales of 7.8 million vehicles - due to accelerator trouble.

Despite the huge recalls, the Japanese giant said it was on course to earn 80 billion yen ($880 million) this fiscal year after posting a net profit of 153.2 billion yen in October-December.

But recall costs and lost sales are expected to slash profits by up to about 180 billion yen ($2 billion) in the current financial year to March, the company said as it came in for ferocious criticism in the United States.

Transportation Secretary Ray LaHood this week vowed that US officials will "continue to hold Toyota's feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe".

LaHood caused a brief furore when he said that owners of Toyotas affected by the accelerator defect should "stop driving" them and take them to a dealer. He later called the remark "obviously a misstatement".

The gas pedal problems have been blamed for several accidents, including an August crash in California in which four family members were killed when their Lexus sped up on a highway and crashed in a ball of flames.