Report: Toyota to Recall 270,000 Prius

Updated at 5:13 p.m. ET

Several news organizations are reporting that Toyota will recall 270,000 Prius models to repair a problem with the design of the car's breaks.

This recall - the latest for the car company - focuses on the third-generation Prius, the Nikkei newspaper reported. Toyota started selling third-generation models in May 2009. In the United States, 100,000 cars sold between May and December 2009 will be recalled, the Nikkei reported. In Japan around 176,000 cars will be recalled, the Nikkei reported.

A Toyota spokesman told CBS News he is unaware of any plans for a Prius recall; however, he would not deny the Nikkei's report. Spokespeople for the Transportation Department and the National Highway Traffic Safety Administration, the department's safety agency, would not confirm the report.

Company spokesman Brian Lyons told The Associated Press it's too soon to talk about a recall. He says the automaker is cooperating fully with a National Highway Traffic Safety Administration probe into the brake troubles.

Also on Thursday, Ford announced that it will update the software for its regenerative break system - the same type of system that is causing a reported Prius recall - on its 2010 Ford Fusion and Mercury Milan hybrids.

Ford received reports that some drivers felt a "different break feel" when the hybrids regenerative breaks switch to conventional hydraulic breaking, which some consumers thought was a loss of brakes.

Earlier Thursday, the Transportation Department in the 2010 Prius, the latest in a series of safety troubles at Toyota that have confused drivers and strained the Japanese automaker's relationship with U.S. regulators.

Toyota also in its prized gas-electric hybrid Thursday.

The NHTSA said it has received 124 reports from consumers about the Prius brakes, 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.

The company says it made a change in the 2010 braking system last month to correct cars in production.

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 car company's other recall over sticking gas pedals involves 2.3 million cars in the U.S. in eight top-selling models including the Camry.

A lawsuit was filed against Toyota Thursday in Los Angeles asking the automaker to expand its recall for models not equipped with a brake override system.

The lawsuit was filed on behalf of the family of Noriko Uno. The family's attorney, Garo Mardirossian, says Uno was killed in August in San Bernardino County when her 2006 Camry suddenly accelerated in a residential street despite her attempts to stop.

The attorney says the fatal crash could have been avoided had the vehicle been equipped with a backup brake system.

Read more about the Toyota recall at CBSNews.com

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In the Prius investigation, 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."

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.

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.
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