Government Opens Probe into Prius Brakes

Updated 12:24 p.m. EST

The U.S. Transportation Department said Thursday it has opened an investigation into brake problems in the 2010 model year Prius.

The National Highway Traffic Safety Administration told The Associated Press it has received 124 reports from consumers, including four reports of crashes. The investigation will look into allegations of momentary loss of braking capability while traveling over uneven road surfaces, potholes or bumps.

According to the report, "some consumers describe the condition as a brief lag in braking capability or a brief surge while braking."

Toyota later responded with its own statement saying it will "cooperate fully" with the investigation.

Read the NHTSA Prius Problem Report

The U.S. investigation, while preliminary, represents another setback for Toyota, which has been battered with two major recalls in the United States covering millions of vehicles. Those involve gas pedals that can get trapped under floor mats or become stuck on their own and fail to return to the idle position. The safety probes have challenged Toyota's long-standing reputation for building safe, quality vehicles.

The Prius was not part of the recall spanning the U.S., Europe and China over sticking gas pedals in eight top-selling models including the Camry. That recall involved 2.3 million cars in the U.S. alone.

NHTSA said investigators have talked to consumers and conducted pre-investigatory field work. The preliminary evaluation involves about 37,000 vehicles in the United States.

"Safety is our top priority," said Transportation Secretary Ray LaHood. NHTSA said LaHood spoke with Toyota president Akio Toyoda late Wednesday and was assured by the executive that Toyota was taking the safety concerns seriously.

NHTSA said it opens 100 investigations every year and there are currently 40 open defect investigations, three of which involve Toyota. NHTSA said its defect and compliance investigations have resulted in 524 recalls involving 23.5 million vehicles during the past three years.

Shares of Toyota traded in the U.S. fell $2.09, or nearly 3 percent, to $71.40 in late morning trading Thursday. Since Jan. 21, when the U.S. recalls were announced, the stock has lost about 22 percent.

Toyota senior managing director Takahiko Ijichi defended the automaker's quality standards.

"We have not sacrificed the quality for the sake of saving costs," he said. "Quality is our lifeline. We want our customers to feel safe and regain their trust as soon as possible."

Read more about the Toyota recall at CBSNews.com

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Toyota acknowledged that it has begun fixing problems with the brakes in its prized Prius, but remains undecided about a recall, adding to the catalog of safety woes - and muddled responses - at the Japanese automaker.

Toyota said Thursday that Prius models sold since late last month, including those shipped overseas, had the problem with the antilock brake system corrected.

But that still leaves the potential flaw in Priuses sold in Japan and overseas before late January. And while Japan's transport minister urged Toyota to consider a recall of the Prius and said he is ordering an investigation into the brake problem, Toyota executive Hiroyuki Yokoyama said the company hasn't yet decided if a recall is necessary.

Toyota reported a $1.7 billion profit for its October-December quarter.

The remodeled gas-electric Prius hybrid, which went on sale in the U.S. and Japan in May 2009. Complaints about braking problems in the Prius - the world's top-selling gas-electric hybrid - have been reported in the U.S. and Japan, combining to some 180, and come amid a recall of nearly 4.5 million vehicles for faulty gas pedals.

The flaw, which requires a software programming change to fix, makes the brakes momentarily unresponsive. Toyota was checking if there were reports of similar problems with other hybrid models though they use a different braking system from the Prius.

Paul Nolasco, a company spokesman, said the time lag for brakes kicking in felt by drivers stem from the two systems in a gas-electric hybrid - the gas-engine and the electric motor.

When the car moves on a bumpy or slippery surface, a driver can feel a pause in the braking when the vehicle switches between the traditional hydraulic brakes and the electronically operated braking system, he said.

The brakes start to work if the driver keeps pushing the pedal, but the driver may momentarily feel they aren't working, he said.

A major Toyota dealership in Tokyo said the automaker had informed dealers that Prius brakes can sometimes fail to work for less than a second but it had not told owners.

"It is disappointing because the Prius was receiving such rave reviews," said Hiroyuki Naito, a manager at the dealership. The latest model Prius hit showrooms last May and is only made in Japan.

In recent weeks, the automaker had answered questions about its overseas recalls for gas pedals with assurances that problems didn't extend to Japanese vehicles, implying it was doing a better job with quality control in Japan.

But Prius owners were worried.

Akira Suzuki, 25, who makes surf boards and teaches surfing, was excited about the high mileage his recently purchased hybrid offers - but concerned about its possible problems.

"I'm not sure how safe it is. I plan to drive very carefully," said Suzuki, who lives in a Tokyo suburb.

Despite snowballing problems with quality, Toyota reported Thursday a $1.7 billion profit for the October-December quarter, citing healthy sales of its green models including the Prius, and predicted it would return to profit for the fiscal year through March.

Toyota shares tumbled on the Tokyo Stock Exchange, falling 3.5 percent to close at 3,280 yen ($36) after plunging 5.7 percent the previous day. Since Jan. 21, when the U.S. recalls were announced, the stock has lost about 22 percent.

Earlier in Washington, U.S. Transportation Secretary Ray LaHood , which he later retracted, that Americans should park their recalled Toyotas unless driving to dealers for accelerator repairs.

The Prius was not part of the recall spanning the U.S., Europe and China over sticking gas pedals in eight top-selling models including the Camry. That recall involved 2.3 million cars in the U.S. alone.

Toyota for the first time gave an estimate of the costs of the global gas-pedal recall. The $2 billion total represents $1.1 billion for repairs and $770 million to $880 million in lost sales.

The tarnishing of the Prius nameplate is also a serious setback for Toyota's recovery from the global auto slump.

"It's very unclear what the future will bring," said Mamoru Katou, auto analyst with Tokai Tokyo Research. "Toyota's image as a leader in hybrids has been hurt."

The automaker has received 77 complaints in Japan about braking problems for the Prius. Separately, the Japanese government confirmed 14 complaints. About 100 complaints over Prius brakes have been filed in the U.S.

At least one accident has been reported in Japan suspected of being linked to faulty braking. In that accident, in July 2009, a Prius crashed head on into another car, slightly injuring two people, according to the transport ministry.

Toyota had looked into that accident and concluded there were no problems with the Prius.

In the U.S., harried dealers began receiving parts to repair defective gas pedals in millions of vehicles and said they'd be extending their hours deep into the night to try and catch up. Toyota said that would solve the problem - which it said was extremely rare - of cars unaccountably accelerating.

Toyota is set to face additional questioning from U.S. congressional and other government investigators. Toyota has shut down several new vehicle assembly lines and is rushing parts to dealers to fix problems with the accelerators, trying to preserve a reputation of building safe, durable vehicles.

The latest recall involves 2009-10 RAV4 crossovers, 2009-10 Corollas, 2009-10 Matrix hatchbacks, 2005-10 Avalons, 2007-10 Camrys, 2010 Highlander crossovers, 2007-10 Tundra pickups and 2008-10 Sequoia SUVs.

U.S. lawmakers who are now digging into the recalls say they would look into the Prius.

Many consumer groups have questioned whether Toyota's gas pedal fix will work and have asserted it could be connected to problems with the electronic throttle control systems.

Yasuaki Iwamoto, auto analyst with Okasan Securities in Tokyo, said the big challenge for Toyota was rebuilding its damaged brand, especially in overseas markets.

"For all people who own Toyota cars, for all people with jobs related to Toyota, this huge sense of uncertainty simply isn't going away," he said.