Huge window switch recall hampers Toyota comeback

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DETROIT — The largest recall in Toyota’s 75-year history could undermine the carmaker’s comeback from natural disasters in Japan 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, including the Camry, the top-selling car in the U.S.

The problem involves the power window switch inside the driver’s door. Toyota said grease wasn’t applied evenly to the switch during production, causing friction and sometimes smoke and fire.

Two years ago, 7 million Toyota vehicles were recalled for floor mats that could trap gas pedals and cause
unintended acceleration.

The latest 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 $1.56, or 2.05 percent, to $74.50 on Wednes­day.
Documents filed by U.S. safety regulators show customers have reported 161 fires and nine injuries. No deaths have occurred.

The 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, though a Camry was destroyed in one case.

Toyota spokesman John Han­son said dealers will inspect the switches and apply a special grease to them.

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 2007-09 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 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.


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