Toyota Admits Prius Brake Problem
Updated at 7:28 a.m. Eastern.
As complaints over malfunctioning brakes mounted in both the U.S. and Japan, Toyota conceded Thursday that the latest model of its popular Prius hybrid had a design flaw in its anti-lock braking system.
Complaints swelled to about 180 in the U.S. and Japan, as the automaker sought to salvage its reputation amid massive global recalls over gas-pedal problems in eight other models.
Toyota Motor Corp. spokeswoman Ririko Takeuchi said Thursday that Toyota found out there were design problems and corrected the design for Prius models sold since late January. But it was still investigating how to inform people who had bought them earlier.
CBS News correspondent Dean Reynolds reports that Toyota dealerships across the U.S. are fielding an ever-growing number of calls from concerned owners.
In Washington, U.S. Transportation Secretary Ray LaHood startled the public with a comment, which he later retracted, that Americans should park their recalled Toyotas unless driving to dealers for accelerator repairs.
The problems with the Prius hybrid are another blow to Toyota in the U.S. - its biggest market - and an embarrassment in the automaker's loyal home turf of Japan, where the transport minister said a recall should be considered.
The popular gas-electric hybrid was not part of the most recent recall over sticking gas pedals in eight top-selling models, numbering about 4.5 million vehicles around the world.
Reynolds reports that the cost of the recalls, the necessary repairs and the lost sales caused by the recent publicity hits are expected to cost the Japanese automaker a whopping $2 billion - and that estimate doesn't include any possible costs incurred by the Prius problems.
Read more about the Toyota recall at CBSNews.com:
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Toyota Dealers Get $75K to Win Back Buyers
LaHood: Stop Driving Recalled Toyotas
Ray LaHood Comments Show Toyota Owners' Conundrum
Toyota Prius Drivers Voice Brake Concerns
LaHood: Toyota Resisted Safety Fix
Analyst: Recall Costs Toyota $155M a Week
Does Toyota's Problem Go Beyond Pedals?
Toyota: New Pedal Parts on Way to Dealers
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.
Toyota has already done fixes for Prius cars sold since late January but has yet to give instructions to people who bought them earlier, said Hiroyuki Naito, a manager at the dealership. The latest model Prius hit showrooms last May.
"It is disappointing because the Prius was receiving such rave reviews," he said.
Toyota said it will explain the Prius braking problems. Details were not immediately available on what Toyota had in the works for Prius cars sold in the U.S. and Europe.
Meanwhile, the Japanese auto giant returned to profit in the October-December quarter and raised its annual earnings forecast. Toyota reported Thursday a quarterly net profit of 153.2 billion yen ($1.7 billion) and cited stronger sales of the Prius and other "green" models. It reported a 164.7 billion yen loss a year earlier.
The results don't reflect the damage from the massive recalls. But the suspension of U.S. sales of eight of its most popular models and repair costs are expected to undermine earnings in the current quarter.
The Prius, the world's best-selling hybrid, has been extremely popular in Japan because of government incentives that made hybrids tax-free. More than 170,000 the new remodeled Prius cars were sold in Japan and about 103,000 have been sold in the U.S. since May.
Japan's transport ministry has ordered the company to investigate complaints of brake problems with the hybrid. LaHood has said the U.S. transportation department was also looking into brake problems.
"We are asking Toyota to look into the matter, including possibly making a recall on the Prius," Transport Minister Seiji Maehara said.
Company officials had repeatedly said cars in Japan weren't covered by its overseas recalls because they used Japanese supplier Denso, hinting the world's biggest automaker was doing a better job maintaining quality control in Japan.
All the Prius cars being reported with possible braking problems were manufactured in Japan.
"The latest Prius troubles have really damaged Toyota's brand. Uncertainty over the Prius troubles will only prompt more consumers to dump Toyota," said Roichi Saito, auto analyst with Mizuho Investors Securities Co. in Tokyo.
Prius owners were also worried.
Akira Suzuki, 25, who makes surf boards and teaches surfing, was excited about the high mileage his recently purchased Prius offers - but worried 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.
Toyota said Thursday it was aware of 77 complaints in Japan about braking problems for the Prius - just a day after the Japanese government had 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 Japanese transport ministry.
Toyota shares tumbled on the Tokyo Stock Exchange, falling 5 percent by Thursday afternoon to 3,230 yen ($35) 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.
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.
At a congressional hearing, LaHood said his advice to an owner of a recalled Toyota would be to "stop driving it. Take it to a Toyota dealer because they believe they have a fix for it." His comments prompted new questions and rattled Toyota stockholders, causing shares to plunge 6 percent overnight on Wall Street.
LaHood later told reporters, "What I said in there was obviously a misstatement. What I meant to say ... was if you own one of these cars or if you're in doubt, take it to the dealer and they're going to fix it."
Adding to Toyota's woes, LaHood said his department had received new complaints about electronics and would undertake a broad review, looking beyond Toyota vehicles, into whether automobile engines could be disrupted by electromagnetic interference caused by power lines or other sources.
Toyota has said it investigated for electronic problems and failed to find a single case pointing in that direction. Toyota declined comment on LaHood's remarks.
But the damage was done for many drivers.
Meredyth Waterman, who bought a 2010 Toyota Corolla in December, said the alarming statements from Washington confused her and she planned to wait until her dealer told her to come get the fix to bring her car in for repairs.
"If it is largely believed to be a rare instance, why would he tell people to stop driving their cars?" asked Waterman, of Burrillville, R.I. "It was an irresponsible thing to say."
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.
Late last year, Toyota recalled about 5 million vehicles over problems with floor mats trapping gas pedals and on Jan. 21, recalled some 2.3 million vehicles in the U.S. amid concerns that gas pedals could become stuck or be slow to return to the idle position.
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 said they would also look into the Prius. Rep. Bart Stupak, chairman of the House Energy and Commerce investigative subcommittee, said his panel would request a briefing from Toyota officials about the hybrid.
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.