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Toyota temporarily halts sales of eight models

The carmaker took the unprecedented action because the vehicles' gas pedals can get stuck and cause unwanted acceleration. Toyota will also stop making the cars and trucks Monday.

January 27, 2010|By Ken Bensinger and Ralph Vartabedian

Toyota Motor Corp. has taken the unprecedented step of halting sales and production of eight models -- including its top-selling Camry and Corolla -- saying their gas pedals can get stuck and cause runaway acceleration.

Industry experts could not recall any time in recent history when a carmaker had stopped both production and sales of so many models at once. Tuesday's move follows two recent recalls aimed at preventing Toyota-made vehicles from surging out of control, which has been blamed in at least 19 deaths and scores of injuries over the last decade, more than for all other automakers combined.

Toyota could pay dearly for the problem, industry analysts said.

Aside from the immediate drop in sales, Toyota's position as the global sales leader, built on its vaunted reputation for trouble-free cars, is now being called into question.

"This could be an extended issue. It is very serious," said Aaron Bragman, an analyst at IHS Global Insight.

The eight models affected accounted for 57% of U.S. sales last year of all Toyota brands, including Lexus and Scion.

Bragman estimated that the move could stop the production and sale of up to 105,000 Toyota cars and trucks a month, based on the most recent sales figures. He noted that the sales freeze comes just as Ford Motor Co., General Motors Co. and Hyundai Motor Co. all were improving their quality and mounting aggressive sales and marketing campaigns.

Toyota's 1,200 U.S. dealers were notified of the action, known in the industry as a stop sale, by e-mail Tuesday afternoon. They were asked to immediately cease selling new models of the affected vehicles and to refrain from selling certain used versions of the same models.

"This is the mother of all stop sales, it appears," said Fritz Hitchcock, who owns Toyota dealerships in Santa Barbara, Northridge and the City of Industry.

Hitchcock said the action could cut up to 75% of new vehicle sales at his lots. "I'd say this was the perfect storm."

Toyota said it stopped sales of the following models and years: 2009 and 2010 RAV4, 2009 and 2010 Corolla, 2009 and 2010 Matrix, 2005 to 2010 Avalon, 2010 Highlander, 2007 to 2010 Tundra and 2008 to 2010 Sequoia.

It also is halting sales of certain 2007 to 2010 Camry sedans, depending on where those vehicles were manufactured; Camry owners should check with their dealer to determine whether their car is affected.

Toyota also said it would shut down production of the models at six assembly lines in the U.S. and Canada starting Monday.

Dealers said a small number of vehicles made outside North America would not be affected because they didn't have the suspect pedal assembly. Lexus and Scion vehicles also were not included in the action.

Toyota said it did not know when dealers could resume selling the cars and trucks because it had not yet determined a remedy to the problem, which in certain rare circumstances can cause the gas pedal to remain depressed after the driver's foot is removed.

"This action is necessary until a remedy is finalized," Bob Carter, general manager of Toyota's U.S. sales division, said in a statement.

"We're making every effort to address this situation for our customers as quickly as possible."

The sales freeze, which a Toyota spokesman said is its most extensive in more than five decades selling cars in the U.S., comes five days after the automaker said it would recall 2.3 million cars and trucks because of the same problem.

That recall in turn came just months after Toyota launched a recall of 4.3 million vehicles, its largest ever, because floor mats could trap the gas pedal and cause sudden acceleration. Most of the vehicles targeted in last week's recall were also included in the previous one.

Toyota began considering halting sales after announcing last week's recall, Toyota spokesman Brian Lyons said. He said that decision was reached Tuesday and announced almost immediately.

"Normally when we make a recall, we already have the countermeasure ready to go," he explained. "But we don't have the countermeasure ready to go in this case, so we decided to implement a stop sale."

The automaker also notified the National Highway Traffic Safety Administration, Lyons said.

NHTSA officials could not be reached for comment Tuesday.

In the wake of last week's action, the agency said it believes the situation "is a serious safety issue, and we are pleased that Toyota is taking immediate action to address it."

Carmakers from time to time order sales stops or halt production lines to fix problems, but usually they are far more limited in scope.

Toyota, for example, temporarily halted sales of the Highlander in 2008 to replace rear seat belts as part of a recall affecting 90,000 SUVs, and Ford was forced to issue several stop-sale orders affecting a limited number of vehicles from 2002 to 2005.

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