Another day, another recall. Normally, automobile recalls are not much of a problem. A recall usually involves bringing your car to a dealership, subjecting yourself up to some sales pitches, getting your car fixed, and driving home. Toyota’s recent string of recalls is more complicated because some of the problems do not have solutions yet.
If you own one of the many Toyota cars affected by one of the company’s recalls, you probably have already received a letter.
Here is what has happened so far:
- November 2, 2009. Toyota/Lexus recalls recent models of the Camry, Avalon, Prius, Tacoma, Tundra, ES350, IS250 and IS350 due to a tendency for the floor mats to obstruct the accelerator pedal. This was a voluntary recall whose solution was simply to remove the driver’s side floor mat. Later that month, Toyota announced a solution to the problem that will require a visit to the dealer.
- November 24, 2009. Toyota recalls 2000-2003 models of the Tundra due to the possibility of excessive corrosion on the frame rear cross-member caused by road salt.
- January 21, 2010. Toyota issues a voluntary safety recall for recent models of the RAV4, Corolla, Matrix, Avalon, Camry, Highlander, Tundra, and Sequoia. This recall is to remedy another problem with the accelerator. In these cars, there may be a tendency for the accelerator pedal to stick, and this is not related to the floor mat problem. On Tuesday, January 26, after months of working with federal safety officials, Toyota decided to stop selling these cars until the problem has been fixed.
- January 27, 2010. Last night, Toyota added to its initial recall pertaining to floor mats obstructing accelerator pedals. Added to the initial list are recent Highlanders, Corollas, Venzas, Matrixes and Pontiac Vibes. The Vibe shares design and construction with the Toyota Matrix.
According to the New York Times, sudden, uncontrolled acceleration in Toyota vehicles has caused 275 crashes and 18 deaths. Researchers have identified 2,274 incidents of sudden acceleration.
Over the past few months, Toyota has recalled 7.6 million cars. General Motors was quick to respond with an incentive for Toyota owners who want to get rid of their cars in favor of one of the American automaker’s vehicles.
Toyota has a strong reputation or being reliable, but these recent events inspire doubt. Here in the United States, shares of Toyota Motor Corp. (TM) have fallen 13% since January 19. If you believe that Toyota will recover, and if you have money you don’t mind losing while gambling in the stock market, it might be a good time to buy Toyota’s stock. I expect Toyota will recover and after some time, their reputation will remain mostly unharmed.
Update: I decided that if I should talk about buying TM, and if I think it’s a good idea for the long term, I should live up to my decision. I bought 10 shares of Toyota Motor Corp.’s ADR today.
Do you see the latest string of crises as an opportunity for investors?
Published or updated January 28, 2010.