Tag Archive | "Toyota"

U.S. Authorities Accuse Toyota Arm of Discriminatory Loan Pricing

Toyota Motor Credit Corp, the lending arm of Toyota Motors Corp, could face an enforcement action from U.S. authorities over its pricing of auto loans through dealerships and could be forced to reimburse borrowers or pay a fine, the company said late Friday, reported Reuters.

On Nov. 25, the U.S. Department of Justice and the Consumer Financial Protection Bureau sent a letter to Toyota Motor Credit, saying that its auto lending practices “resulted in discriminatory pricing of loans to certain borrowers in contravention of applicable laws,” the company said in a filing with the U.S. Securities and Exchange Commission.

Unless Toyota Motor Credit agrees to a resolution with the agencies voluntarily, which would include “monetary relief” in addition to changes to its loan pricing policies, the Justice Department and the CFPB were prepared to bring an enforcement action, the filing said.

Toyota Motor Credit added it would work with the agencies to reach a resolution.

A spokesman for the CFPB declined to comment. A spokeswoman for the Department of Justice did not immediately respond to a request for comment.

In December 2013, Ally Financial Inc (ALLY.N) was forced to pay $98 million to resolve similar discriminatory loan pricing charges from the Justice Department and the CFPB.

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Toyota Recalls More Cars for Dangerous Takata Air Bags

Toyota Motor Corp said on Thursday it would recall 57,000 vehicles globally to replace potentially deadly air bags made by Takata Corp, as a safety crisis around the Japanese auto parts maker looks far from being contained, reported Reuters.

Toyota’s action follows a recall by rival Honda Motor Co for the same problem two weeks ago after revelations of a fifth death, in Malaysia, linked to Takata’s air bag inflator. More than 16 million vehicles have been recalled worldwide since 2008 over Takata’s air bag inflators, which can explode with too much force and spray metal fragments into the car.

Toyota is recalling some Vitz subcompacts, called Yaris in some markets, and RAV4 crossover models made between December 2002 and March 2004. About 40,000 are in Japan, 6,000 in Europe and the rest in other markets outside North America. Toyota said it was not aware of any injury or death related to the recall.

Separately, Toyota’s small-car subsidiary Daihatsu Motor Co also issued a recall, in Japan, of 27,571 Mira minivehicles produced between December 2002 and May 2003 for the same reason – its first recall involving Takata inflators.

About 2.6 million vehicles have been recalled in Japan so far for Takata’s air bag inflators, a transport ministry official said.

Takata-related recalls are almost certain to balloon after U.S. safety regulators on Wednesday ordered the company to expand a regional recall of driver-side air bags to cover the entire United States, not just hot and humid areas where the air bag inflators are thought to become more volatile.

Takata has so far resisted expanding the recall, saying that could divert replacement parts away from the high-humidity regions that need them most.


The U.S. National Highway Traffic Safety Administration (NHTSA) has given Takata until Tuesday to issue a nationwide recall, and could fine it up to $7,000 per vehicle if it doesn’t comply. It remains unclear how many more vehicles that would add, but it could be in the millions, affecting five automakers: Ford Motor Co, Honda, Chrysler Group LLC, Mazda Motor Corp and BMW AG.

A U.S.-wide recall of driver-side air bags could cost an estimated 70 billion yen ($600 million), Nomura Credit Research analyst Shintaro Niimura wrote in a Nov. 26 report.

“Takata could need nearly 200 billion yen ($1.7 billion) of reserves in the event of a U.S. nationwide recall (including passenger-side air bags), and the company’s cash-on-hand would be tightly squeezed,” he wrote, noting Takata had just 8.33 billion yen of cash and deposits.

“If the company makes any missteps, we cannot say that there is ‘zero’ chance of the company dying a sudden death – that is, being hit with excessive debt or facing a cash-insolvency bankruptcy,” Niimura added.


NHTSA’s action and the latest recalls come on the heels of an announcement by Japan’s transport ministry on Wednesday that it received a report of an “unusual deployment” of a Takata air bag as it was being removed from a scrapped car on Nov. 6. The inflator was manufactured in January 2003 at Takata’s Monclova, Mexico factory, and had not been subject to recalls, at least in Japan, raising the prospect of an expanded recall, the ministry said.

A Toyota spokesman said the scrapped car was a 2003 Will Cypha, a Japan-only compact model that is no longer in production. Toyota said it was investigating the issue as part of its wider probe into Takata’s air bag inflators. “We will take prompt and appropriate action if we find there is a need for a recall as a result of the investigation,” it said.

Takata shares dropped as much as 7.9 percent in Tokyo on Thursday, closing down 4.8 percent. Toyota shares eased 0.5 percent and Daihatsu shares slipped 1.2 percent, roughly in line with the broader market. Shares of Honda, Takata’s top customer, underperformed other auto stocks, falling 3.3 percent.

Honda had said the Takata air bag inflator that failed in the Malaysia crash had likely been exposed to excessive moisture at the supplier’s now-shuttered plant in LaGrange, Georgia. A transport ministry official said no further recalls are expected in Japan related to the problem identified at the LaGrange line between November 2001 and November 2003.

A second U.S. congressional hearing is scheduled for Wednesday, where representatives from Takata, NHTSA and several automakers will testify.

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Land Rover, Toyota Earn Top Honors in ALG’s Residual Value Awards

SANTA BARBARA, Calif. — ALG, TrueCar’s analytics division, named Land Rover and Toyota as the top premium and mainstream brands during its 15th annual Residual Value Awards.

The awards program looks at 26 vehicle segments and forecasts which will retain the highest percentage of MSRP value after a three-year period. The awards will be presented at the Los Angeles Auto Show.

“Residual value is important for automakers and consumers because it’s a complete indicator of the vehicles future value, accounting for quality durability and brand desirability among other factors,” said Larry Dominique, president of ALG.

Land Rover’s win as the top premium brand is the company’s first. The brand was credited with having a consistent “stream of hot, new vehicles” with high customer demand, says ALG.

“Some Land Rover models are in such high demand that they’re selling above MSRP — a remarkable achievement that’s only possible with manufacturer restraint and a tightly controlled supply chain,” said Dominique.

Toyota was the top mainstream brand, capturing five segment awards, including top honors in the alternative-fuel, truck and premium categories.

Eight new vehicles made the winners list for the first time, including the Dodge Charger for full-size car, the Subaru WRX for sports car and the Ford Transit Connect for midsize commercial van.

“It is great to see such a diverse mix of brands winning this year,” said Dominique. “It shows the industry as a whole continues to improve residual values benefitting consumers and automakers alike.”

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Honda Heightens U.S. Response to Problems With Takata Air Bags

Honda Motor Co. said on Thursday that it is expanding its U.S. response to potentially explosive air bags made by Takata Corp. , adding a small number of vehicles in certain hot and humid regions and upgrading its previous action to an official recall, reported The WSJ.

Honda’s move comes after rivals Toyota Motor Co. and Nissan Motor Co. took similar action last month over Takata air bags that could send out metal fragments into the cabin of cars. The issue is linked to as many as four deaths.

Honda said it is officially recalling vehicles equipped with the potentially defective Takata air bags in 13 high-humidity states and U.S. territories—specifically, Alabama, Florida, Georgia, Hawaii, Louisiana, Mississippi, South Carolina, Texas, Puerto Rico, U.S. Virgin Islands, Saipan, Guam, and American Samoa— and upgrading its previous action from a so-called safety-improvement campaign.

Honda also said it has determined the air bags contain a defect which if exposed to high-humidity conditions over long periods, can result in an “abnormal deployment.”

The specific number of vehicles under recall is undetermined at this point, the company said. The change to a U.S. recall status now requires Honda to abide by certain regulatory reporting requirements.

Honda said no injuries or fatalities have been confirmed for “the identified [vehicle] population related to this recall.”

The company’s move is in response to letters that the U.S. federal auto-safety regulator sent to 10 car makers and Takata in late October. In the letters, the National Highway Traffic Safety Administration requested that companies promptly recall vehicles in certain hot and humid regions, in some cases regions where they had already announced safety campaigns.

The NHTSA and Takata have said the air bags are at risk of exploding with too much force during a collision and spraying the driver and occupants with metal fragments.

In all, NHTSA has said 7.8 million vehicles made by 10 auto makers could be affected by the potentially defective Takata air bags and has urged customers to act immediately to notices sent by the manufacturers to make repairs. Of those vehicles, NHTSA has identified 5 million Honda and Acura cars.

The agency Takata have come under fire in recent weeks by lawmakers and safety advocates calling for a nationwide recall of all cars suspected to have the defective air bags.

Earlier this week, the NHTSA required Honda to produce documents pertaining to its eight recalls and service actions since 2008 involving Tataka air bags. Most of the cars involved are older-model vehicles. Honda says the repair involves replacing the air bag inflater on the passenger side.

The NHTSA since June has been investigating whether high humidity and temperature in certain regions had any impact on Takata air bags and inflaters.

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Toyota Global Sales Rise 2.8% in Tight Race vs Volkswagen

Toyota Motor Corp. said global sales climbed 2.8 percent in the first nine months of this year as the carmaker battles Volkswagen AG for leadership, reported Bloomberg.

Worldwide deliveries for Toyota, including its Hino Motors Ltd. and Daihatsu Motor Co. units, climbed to 7.6 million vehicles through September, spokesman Dion Corbett said by phone. Volkswagen reported a 5.3 percent gain in sales to 7.4 million vehicles, excluding results for its two heavy-truck units.

The tight race between global giants is playing out as automakers, their customers and regulators contend with mounting recalls and rising scrutiny over the safety of vehicles. The industrywide struggle with defective cars poses risk to both Toyota and Volkswagen, which are benefiting from increasing demand in the China and U.S. markets.

“It’s a fantastic race, with their strengths coming in different parts of the world,” James Chao, a Shanghai-based director at IHS Automotive, said by phone. “You see the U.S. coming back quite strongly for Toyota, and then you see the great engine of growth for Volkswagen being China, which is continuing to perform.”

President Akio Toyoda told shareholders the company was “advancing into uncharted territory” in the annual report the Toyota City, Japan-based carmaker released last month. Toyoda, 58, noted the unprecedented milestone of selling more than 10 million vehicles worldwide last year, a mark both his company and Volkswagen are on pace to exceed again in 2014.

Record Sales

The industry is selling record numbers of vehicles globally as crises involving auto safety swirl. Air bags made by Takata Corp. are linked to at least four deaths and more than 30 injuries in the U.S. after the safety devices deployed with too much force, spraying metal shrapnel at occupants. U.S. authorities have begun an investigation and almost 8 million cars made by 10 automakers have been recalled to fix the hazard.

In the U.S., General Motors Co. (GM), the No. 3 automaker by worldwide deliveries, faces death claims that could rise into next year involving defective ignition switches. The Detroit-based company has confirmed 29 fatalities tied to the flaw, which it failed to fix after more than a decade.

Even with those concerns, GM sales rose 2 percent to 7.37 million vehicles during the year’s first nine months. The biggest U.S. automaker last week reported third-quarter profit that beat estimates as North American customers flocked to pickups and sport-utility vehicles and recall expenses ebbed.

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Toyota Confirms Sale of Part of Tesla Stake

Toyota Motor Corp. said Friday it has sold some of its stake in Tesla Motors Inc., days after German luxury car maker Daimler AG disclosed it had divested its Tesla shares for a sizable gain, reported The WSJ.

The sale came “as part of our process of regularly reviewing our investment portfolio,” Toyota said in a statement. “We have a good relationship with Tesla, and will evaluate the feasibility of working together on future projects.”

Toyota invested $50 million in a then-fledgling Tesla in 2010. In March, the Japanese auto giant reported owning a 2.4% stake in Tesla shares, with an indicated value of about $690 million.

Earlier this year, Tesla disclosed that its agreement to sell batteries to Toyota would likely end this year. Toyota executives have recently criticized electric cars, saying vehicles powered by fuel cells running on hydrogen are a better choice as an alternative to gasoline or diesel fuels. Tesla Chief Executive Elon Musk has in turn criticized fuel cells.

Toyota didn’t say how many Tesla shares it sold. Daimler earlier this week said it sold its entire 4% stake in Tesla, the remaining shares from an initial $50 million investment, for a gain of about $780 million.

Daimler and Toyota each were sitting on large gains on their early investments in Tesla. Each of the two global auto giants now increasingly encounter Tesla as a rival. Tesla’s Model S sedan, which starts at $71,000, competes with Daimler’s Mercedes S-class and Toyota’s Lexus LS sedans for the most affluent consumers in the U.S., China and Europe.

Tesla shares surged during the past year to a peak of $291, but since September Tesla’s share price has skidded by about 19%.

Toyota’s action was first reported by Japan’s Nikkei financial news service.

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