Toyota’s US sales halt to deal blow to earnings after growth strategy compromised quality

Toyota halts US sales of Camry, 7 other models

TOKYO — The faulty gas pedals that prompted Toyota to suspend U.S. sales of eight of its most popular models — including the Camry, America’s best-selling car — are also in its vehicles sold in Europe, an official with the automaker said Wednesday.

Toyota Motor Corp. announced late Tuesday the unprecedented sales suspension to fix gas pedals that could stick and cause acceleration without warning. Last week, Toyota issued a recall for the same eight models involving 2.3 million vehicles.

Toyota is also halting production at six North American car-assembly plants, beginning the week of Feb. 1, and gave no date on when production could restart.

The problem could spread to Europe, where a similar accelerator part is being used, said Toyota spokeswoman Ririko Takeuchi, while declining to give the number of vehicles affected. The company was studying possible responses, including a recall, she said.

The problem part comes from one U.S. supplier and does not affect models that use parts from different suppliers, Takeuchi said. Toyota’s Japan plants are not affected.

“For Europe, the number and models potentially concerned are under evaluation,” said Philippe Boursereau, spokesman for Toyota France.

The automaker said the U.S. sales suspension includes the following models: the 2009-2010 RAV4, the 2009-2010 Corolla, the 2007-2010 Camry, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.

Toyota has said it was unaware of any accidents or injuries due to the pedal problems associated with the recall, but could not rule them out for sure.

“This action is necessary until a remedy is finalized,” said Bob Carter, Toyota’s group vice president and general manager.

The automaker’s shares fell 4.3 percent in Tokyo trading Wednesday.

Toyota spokesman Mike Goss said most workers were expected to be at their jobs during the assembly line shutdown. Workers will receive additional training or work on improvements to their assembly processes, but can also take vacation or unpaid leave, he said.

About 300 workers who build V8 engines at a Toyota plant in Huntsville, Ala., will be affected, said Stephanie Deemer, a spokeswoman for the plant. Goss said the shutdowns will also affect engine plants in Georgetown, Ky., and Buffalo, W.Va.

Toyota dealers said they were concerned the move would hamper sales and were hopeful parts to fix the problem could be distributed quickly.

“They’re going the extra mile to reassure people that they really care about the customers,” said Earl Stewart, owner of a Toyota dealership in North Palm Beach, Fla. “It is something that’s going to be at least a short-term hardship on the dealers, and especially on Toyota.”

Mamoru Katou, analyst at Tokai Tokyo Research, said Toyota was likely reorganizing production plans, such as switching suppliers, and shipping in parts from Japan. “The problem is extremely serious,” said Katou. “The models are precisely those Toyota had been preparing to sell in big numbers.”

Toyota expects to sell 2.19 million vehicles in North America in 2010, up 11 percent from 2009, according to sales targets released Tuesday. Globally, Toyota said it was planning sales of 8.27 million vehicles this year, up 6 percent from 2009.

But those numbers have not figured in the U.S. sales stoppage, Takeuchi said.

The automaker’s problems in the U.S. may be an extension of the spate of quality problems that plagued Toyota several years ago in Japan, its home market, during the aggressive growth strategy pursued under former president Katsuaki Watanabe.

In 2006, the Japanese government launched a criminal investigation into accidents suspected of being linked to vehicle problems, though nobody was charged. Watanabe later acknowledged overzealous growth was behind the quality problems.

Watanabe was replaced last year by Akio Toyoda, the grandson of Toyota’s founder.

Tuesday’s announcement follows a larger U.S. recall months earlier of 4.2 million vehicles because of problems with gas pedals becoming trapped under floor mats, causing sudden acceleration. That problem was the cause of several crashes, including some fatalities.

About 1.7 million vehicles fall under both recalls.

The auto company said the sales suspension wouldn’t affect Lexus or Scion vehicles. Toyota said the Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser and select Camry models, including all Camry hybrids, would remain for sale.

Toyota sold more than 34,000 Camrys in December, making the midsize sedan America’s best-selling car. It commands 3.4 percent of the U.S. market and sales rose 38 percent from a year earlier. Sales of the Corolla and Matrix, a small sedan and a hatchback, totaled 34,220 last month, with 3.3 percent of the market and sales up nearly 55 percent from December of 2008.

AP Business Writer Greg Keller in Paris, Associated Press auto writers Ken Thomas in Washington and Tom Krisher in Detroit contributed to this report.