Toyota Motor Corp said it is recalling nearly half a million of its flagship Prius and other hybrid cars for braking problems as it seeks to address criticism over the handling of its worst safety crisis.
The world's largest automaker is under fire for two other recalls covering more than 8 million vehicles worldwide due to problems with slipping floormats and sticky accelerator pedals.
It is also facing a potential rush of litigation for crashes linked to those problems and blamed for 19 deaths and numerous injuries in the United States over the past decade.
Documents from Toyota and seen by Reuters showed it was recalling a total of 436,000 units of its 2010 Prius, Sai, Prius PHV (plug-in hybrid), and Lexus HS250h hybrids globally. The recall covers 223,000 vehicles in Japan and 150,000 in North America.
"Toyota has been, beyond any doubts, the top player in hybrid car segment, and the fact that Prius and other hybrid models will be part of this massive recall significantly dents its image," said Suh Sung-moon, an analyst at Korea Investment & Securities in Seoul.
The fallout would likely help the likes of Korea's Hyundai Motor, which is set to launch its first hybrid model in the United States later this year, he added.
CLOSER COMMUNICATIONS
The new Prius is sold in some 60 countries, with cumulative sales of almost 350,000 units.
Toyoda said the company founded by his grandfather would work more closely with U.S. regulators.
"I have spoken with U.S. Transportation Secretary Ray LaHood and given him my personal assurance that lines of communications with safety agencies and regulators will be kept open, that we will communicate more frequently and that we will be more vigilant in responding to those officials on all matters," Toyoda wrote in an op-ed in the Washington Post.
Owners of the latest, third-generation Prius have complained that on bumpy roads and on ice, the regenerative brakes which help charge the vehicles' electric battery appear to slip and it lurches forward before the traditional brakes engage.
Toyota has said it had fixed a software glitch in the anti-brake lock system (ABS) on the model at the end of last month, and that cars being produced now would not be subject to any recall.
An official at Japan's Transport Ministry said Toyota would halt sales of all the hybrid models in Japan except the 2010 Prius until a fix was in place, likely in late-February or early March.
U.S. automaker Ford Motor Co said last week it would roll out a software patch for consumers to address similar problems with braking on two of its hybrid models, without filing a recall.
Shares in Toyota, which lost about a fifth of their value since late January, closed up 2.9 percent, outperforming a 0.2 percent fall in the Nikkei average.
"The shares fell while Toyota appeared not to be doing anything to deal with its problems. But now, the fact that they're taking concrete steps on the issue is being seen as positive," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
Analysts were reluctant to call the bottom for the stock, however.
"I think it's still much too early to say that all the bad news is out," said Norihiro Fujito, general manager at Mitsubishi UFJ Securities in Tokyo. "At least for now we're seeing short-covering and buying on a sense that the share has been oversold."
LAWSUITS
In the apparent first of a potential rush of legal claims over the Prius, the owner of a 2010 Prius has sued Toyota in Los Angeles, claiming the automaker failed to fix a brake defect and seeking a court order requiring a recall.
Meanwhile, complaints to U.S. safety regulators about 2010 Prius brake problems have jumped sharply since the Transportation Department announced a formal investigation last week.
Several complaint files total more than 1,000 reports from vehicle owners but a partial review of the documents submitted to NHTSA found some duplicates, so the exact number is unclear. Four injuries were reported.
More bad news came when KBB, or Kelley Blue Book, said on Monday it plans to cut U.S. used-car values of recalled Toyotas by 1.5 percent "on concerns around the growing supply of unsold Toyotas on both dealer lots and at auctions."
Toyota faces further scrutiny on Wednesday when its North America chief executive, Yoshimi Inaba, testifies to Congress in front of the House Oversight Committee in Washington.
Transportation Secretary LaHood and NHTSA Administration Administrator David Strickland will also testify.