AN cites Japanese newspaper Nikkei in claiming that Toyota will announce a total profit of as much as $532 million. This is despite the sagging sales which caused the company to recall a lot of its cars, and the inevitable weakness of the US auto industry this year. Before AN’s report, Toyota had already anticipated losing at least 20 billion yen (with $213 million in US funds) by the end of this year.

However, Nikkei claims that the cost cutting implemented by Toyota coupled with the weak value of the Japanese Yen might just help the company work beat the estimated loss. The Japanese daily further forecasted that the global revenues from Toyota’s car and truck sales will only be down by five percent. The company should still be able to sell around 7.2 million vehicles.

Automotive News also cited Thompson Reuters who forecasted that Toyota will profit 42.3 billion yen or US$457 million before the first half of this year ends. The company is set to file its official earnings in 2011. Production of new cars, including the anticipated Prius minivan which is said to run on lithium-ion batteries, is still underway.

Rigorously Tested Reinforced Pedals Will Eliminate the Excess Friction that Caused Sticking

Toyota Will Make Concerted Effort to Repair Recalled Vehicles as Quickly and Conveniently as Possible

TORRANCE, Calif., February 1, 2010 – Toyota Motor Sales (TMS) U.S.A., Inc., today announced it will begin fixing accelerator pedals in recalled Toyota Division vehicles this week. Toyota’s engineers have developed and rigorously tested a solution that involves reinforcing the pedal assembly in a manner that eliminates the excess friction that has caused the pedals to stick in rare instances. In addition, Toyota has developed an effective solution for vehicles in production.

Parts to reinforce the pedals are already being shipped for use by dealers, and dealer training is under way. Many Toyota dealers will work extended hours to complete the recall campaign as quickly and conveniently as possible, some even staying open 24 hours a day. The company has also taken the unprecedented action of stopping production of affected vehicles for the week of February 1.

“Nothing is more important to us than the safety and reliability of the vehicles our customers drive,” said Jim Lentz, president and Chief Operating Officer, TMS. “We deeply regret the concern that our recalls have caused for our customers and we are doing everything we can – as fast as we can – to make things right. Stopping production is never an easy decision, but we are 100% confident it was the right decision. We know what’s causing the sticking accelerator pedals, and we know what we have to do to fix it. We also know it is most important to fix this problem in the cars on the road.”

Lentz added: “We are focused on making this recall as simple and trouble-free as possible, and will work day and night with our dealers to fix recalled vehicles quickly. We want to demonstrate that our commitment to safety is as high as ever and that our commitment to our customers is unwavering.”

On January 21, Toyota announced its intention to recall approximately 2.3 million select Toyota Division vehicles equipped with a specific pedal assembly and suspended sales of the eight models involved in the recall on January 26.

Toyota vehicles affected by the recall include:
• Certain 2009-2010 RAV4
• Certain 2009-2010 Corolla
• 2009-2010 Matrix
• 2005-2010 Avalon
• Certain 2007-2010 Camry
• Certain 2010 Highlander
• 2007-2010 Tundra
• 2008-2010 Sequoia

No Lexus Division or Scion vehicles are affected by these actions. Also not affected are Toyota Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser, Highlander hybrids and certain Camry models, including Camry hybrids, all of which remain for sale.

Further, Camry, RAV4, Corolla and Highlander vehicles with Vehicle Identification Numbers (VIN) that begin with “J” are not affected by the accelerator pedal recall.

In the event that a driver experiences an accelerator pedal that sticks in a partial open throttle position or returns slowly to idle position, the vehicle can be controlled with firm and steady application of the brakes. The brakes should not be pumped repeatedly because it could deplete vacuum assist, requiring stronger brake pedal pressure. The vehicle should be driven to the nearest safe location, the engine shut off and a Toyota dealer contacted for assistance.

Detailed information and answers to questions about issues related to this recall are available to customers at www.toyota.com/recall and at the Toyota Customer Experience Center at 1-800-331-4331.

How Toyota Will Fix Recalled Vehicles

Toyota has pinpointed the issue that could, on rare occasions, cause accelerator pedals in recalled vehicles to stick in a partially open position. The issue involves a friction device in the pedal designed to provide the proper “feel” by adding resistance and making the pedal steady and stable. The device includes a shoe that rubs against an adjoining surface during normal pedal operation. Due to the materials used, wear and environmental conditions, these surfaces may, over time, begin to stick and release instead of operating smoothly. In some cases, friction could increase to a point that the pedal is slow to return to the idle position or, in rare cases, the pedal sticks, leaving the throttle partially open.

Toyota’s solution for current owners is both effective and simple. A precision-cut steel reinforcement bar will be installed into the assembly that will reduce the surface tension between the friction shoe and the adjoining surface. With this reinforcement in place, the excess friction that can cause the pedal to stick is eliminated. The company has confirmed the effectiveness of the newly reinforced pedals through rigorous testing on pedal assemblies that had previously shown a tendency to stick.

Separately from the recall for sticking accelerator pedals, Toyota is in the process of recalling vehicles to address rare instances in which floor mats have trapped the accelerator pedal in certain Toyota and Lexus models (announced November 25, 2009), and is already notifying customers about how it will fix this issue. In the case of vehicles covered by both recalls, it is Toyota’s intention to remedy both at the same time.

MEDIA CONTACTS:

Toyota Motor Sales, Corporate Communications
(310) 468-5297
(310) 468-7359

Media Web site: http://www.toyotanewsroom.com
Public Web site: http://www.toyota.com

The company estimates that they will need about $1 billion to follow all the new industry rules from the federal government and California.

California requires manufacturers that sell more than 60000 vehicles in a year to have 3% of the units as zero emissions. This puts automakers like Toyota, Ford, and Honda in a no choice position because of the state legislation.

Chrysler and General Motors will also have to follow the new rules but do not require as much budget considering that the other car makers share the bigger chunk of the market.

The needed $1 billion of funding can be broken down into production of components needed for building the electric vehicles, equipment, and service centers. They also have to consider things like training of the manpower, marketing, and coverage for the vehicle’s guarantees and warranties.

Bloomberg reports that based on the current sales figures of Toyota, 3% of it or around 15000 units should be zero-emission. In case the car manufacturer fails to meet the state requirement, California can ban Toyota from selling their products.

The car manufacturers are currently studying the most effective steps to meet the regulations. The hard part is convincing the public to purchase the electric vehicles that they will be pushing for.