No problems with Corolla in India, says Toyota official  

February 18, 2010

Japanese carmaker Toyota Motor Corp is facing the heat over vehicle recalls. Reports indicate that there are problems with the steering mechanism in its Corolla models sold in the US. However, an official from the company’s Indian arm has said that its Corollas sold in India do not face these problems.

“As of yet, no decision has been made on the recall of the Corolla in the US. In case of India, ours is an Asian model, (made by a) different supplier altogether, therefore (there is) no impact on us at all,” said Sandeep Singh, deputy managing director, Toyota Kirloskar Motors India.

Meanwhile, according to media reports, the National Highway Traffic Safety Administration (NHTSA) of the US is likely to open an investigation into a possible flaw in the steering systems for the 2009-2010 Corolla, that may lead to another massive recall for Toyota. A recall of these Corollas could affect 500,000 cars in the US. Last year, Toyota sold about 1.3 million Corollas across the globe, and nearly 300,000 were sold in the US alone.

Earlier, US drivers had complained that the brakes in the Toyota Prius would fail to work at slow speeds. On slick, bumpy or icy surfaces, the vehicle would accelerate. Toyota in turn blamed the glitch on the software within the anti-lock braking system. On the issue of the problem facing the Prius in the US, Mr Singh had earlier told Moneylife that the company would not change its plans to launch the hybrid in India, saying that the error in the brakes occurred only in a certain batch which had been sold in the US.

In the US, the recent developments related with the Corolla have raised fresh concerns for the Japanese carmaker ahead of next week's Congressional hearing about the recalls. Doubts have been raised whether Toyota was quick enough in recalling millions of cars over problems involving accelerator pedals and braking systems.

Toyota has said that it would set aside $2 billion for the cost of the recall of about 8 million vehicles with accelerator problems. It later recalled some vehicles from the 2010 lot of the Prius. According to US media reports, some class-action suits have been filed in the US that could cost the company some $3.20 billion, and this number could rise.

“By the time Toyota is finished with its troubles, the cost in lost sales and legal settlements could reach $10 billion,” said an analyst Douglas McIntyre, writing at a website called 247wallst.com.
— Aaron Rodrigues