Toyota halts Lexus GX 460 SUV sales after safety warning
THE TOYOTA RECALL CRISIS
Toyota halts Lexus GX 460 SUV sales after safety warning
From wire reports
Automotive News | April 13, 2010 – 6:56 pm EST
UPDATED: 4/13/10 10:56 p.m. ET
TOKYO/DETROIT (Reuters) — Toyota Motor Corp. suspended sales of the 2010 Lexus GX 460 on Tuesday after influential magazine Consumer Reports urged car shoppers not to buy the SUV, calling it a "safety risk" that could roll over.
Toyota said its engineers were "vigorously testing" the luxury model to identify the risk cited by Consumer Reports, which said the vehicle was prone to slide when driven in sweeping turns and gave it a "not acceptable" rating.
The rare safety warning from the magazine, which is seen as an objective voice on auto safety and quality in North America, comes at a time when Toyota is battling to repair damage to its reputation from a series of recalls.
"We are taking the situation with the GX 460 very seriously and are determined to identify and correct the issue Consumer Reports identified," Lexus Group Vice President Mark Templin said in a statement.
"At this time we have asked our dealers to temporarily suspend sales of the 2010 GX 460," Templin said.
The automaker said it would provide a loaner vehicle until a remedy is available to owners who are concerned.
The last time Consumer Reports concluded that a vehicle was "not acceptable" for consumers to buy was in 2001, when it warned consumers away from the Mitsubishi Montero Limited.
The warning also stands out because past endorsements from Consumer Reports have been credited as one reason for Toyota’s steady sales growth in the United States over the past 15 years.
"It certainly does no favors for Toyota and adds doubts in people’s minds as to the safety and reliability of Toyota vehicles," IHS Global Insight analyst Aaron Bragman said.
Toyota has struggled under massive recalls due to defective sticky accelerator pedals and the potential for floor mats to entrap the accelerator. The sticky accelerator pedals also led to U.S. sales and production halts.
Another chink in Toyota’s armor
U.S. safety regulators have proposed a record $16.4 million fine against Toyota, the highest allowed, accusing the automaker of knowingly delaying a recall over the defective accelerator pedals and may seek more penalties. The recalls also sparked congressional hearings and numerous lawsuits.
The automaker’s U.S. sales fell 16 percent year-over-year in January and 9 percent in February before rising 41 percent in March under unprecedented incentives. Toyota has extended broad incentives and widened a maintenance offer into May.
Investigations continue into whether unintended acceleration, which Toyota has attributed to mechanical issues, also could have been caused by electronics issues.
Dennis Virag, president of the Automotive Consulting Group, said Toyota appears to have work to do on its software strategy to manage situations within the vehicle under normal or panicked driving situations.
"It is another chink in their armor and an indication that perhaps they do have software problems not only in this vehicle but in other vehicles as well," Virag said.
Consumer Reports said the sliding its test drivers found in the GX 460 could cause rollover accidents resulting in serious injury or death. It said it knew of no reports of such accidents.
"CR is urging consumers not to buy the GX 460 until the problem has been fixed," the magazine said in a statement.
Toyota has sold about 5,400 of the Lexus GX 460 SUVs in the four months since it has been on the market. The luxury SUV, which is based on the same platform as the Toyota 4Runner, starts at just over $50,000.
Consumer Reports said the vehicle’s electronic stability control did not intervene quickly enough to stop the vehicle from sliding out in a turn. When pushed to its limits, the rear slid out almost sideways before it regained control.
The magazine said the risk of a rollover accident in the GX 460 was significant because it is a tall SUV with a high center of gravity.
NHTSA’s database of complaints by consumers showed no entries related to that Lexus model as of late yesterday.
Toyota’s U.S. sales rose 41 percent in March after two months of declines, as the automaker offered incentives such as no-interest loans and discount leases. The March gains included a 42 percent increase for Lexus. GX sales tripled last month to 1,785 and rose almost threefold to 4,787 in the first quarter.
Consumer Reports checked the initial findings in the “lift-off oversteer” test of the GX by repeating it on a second vehicle, said Douglas Love, a spokesman for the magazine.
In the oversteer test, “as the vehicle is driven through a turn, the driver quickly lifts his foot off the accelerator pedal to see how the vehicle reacts,” Consumer Reports said.
The publication has more than 7 million subscribers to its print and Web versions. Unlike other quality reviewers, Consumer Reports doesn’t allow companies to use its assessments in advertising.
The magazine’s safety ratings have caused other automakers to sue Consumers Union. After Isuzu Motors Ltd. sued over a “not acceptable” rating on its 1996 Trooper SUV, a federal jury in Los Angeles in 2000 ruled that Consumers Union hadn’t libeled or defamed the company.
A Suzuki Motor Corp. lawsuit over a Consumers Union rating of the Samurai small SUV was dismissed in 2000 by a federal judge in Santa Ana, California.
Mitsubishi in 2001 attacked the magazine’s “not acceptable” safety rating on the Montero as a misrepresentation. Consumers Union stood by its tests, in which it said the vehicle tipped onto two wheels in turns.
Bloomberg News contributed to this report