Toyota Recalls Prius Over Brake Problems

MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

MICHELE NORRIS, host:

And I'm Michele Norris.

If you drive a Toyota Prius, some of you may already be planning that trip to the mechanic to get your brakes checked. A recall has been looming for the popular hybrid, and today, Toyota made it official. So, on top of the company's other recent problems, it's now recalling more than 400,000 vehicles worldwide because of a defect in the brakes.

BLOCK: Roughly a third of those were sold in the U.S: the 2010 Prius model plus a smaller number of Lexus hybrids, the model HS 250h. In a moment, we'll get an expert to explain the special braking system for these hybrids.

But first, NPR's Louisa Lim reports on the latest Toyota recall from Tokyo.

LOUISA LIM: As the cameras click, this could have been another moment of humiliation for Toyota's embattled President Akio Toyoda. Announcing the recall of Toyota's pride and joy, its flagship high-tech hybrid for brake problems was never going to be easy, especially coming after the recall of around eight million other cars for gas pedal and floor mat problems. But his message was clear and unequivocal.

Mr. AKIO TOYODA (President, Toyota Motor Corporation): We will do everything in our power to regain the confidence of our customers.

LIM: Four hundred and thirty thousand cars will be recalled from four different hybrid models. They'll need a software fix from dealers, which can be done in 40 minutes and will begin tomorrow in Japan. The official in charge of quality, Shinichi Sasaki, claimed that these cars do meet safety standards currently. But the recall would go ahead anyway due to customer complaints. There was another apology and another admission from the CEO.

Mr. TOYODA: (Through Translator) Toyota is not omnipotent or free from failure. When we make mistakes or get complaints, we always correct them and end up with better products.

(Soundbite of advertisement)

Unidentified Man: In recent days, our company hasn't been living up to the standards that you've come to expect from us or that we expect from ourselves.

LIM: With this new approach in a new U.S. ad, Toyota seems to have a new crisis management strategy. Writing in The Washington Post today, Toyoda said as president he was taking personal responsibility. This apparently marks and end to the last strategy described by one analyst here of minimize, mitigate, and shift responsibility. But Toyota's reputation revolved around safety and quality, and fixing the damage to the brand isn't going to be easy. Temple University's director of Asian Studies, Jeff Kingston, however is confident.

Professor JEFF KINGSTON (Asian Studies Director, Temple University): They're going to have to dip in to that treasure bank of profits they've salted away over the years. But they're going to do it and I think they're going to come out aggressive to try to turn this around and to turn public opinion around.

LIM: Toyota hasn't yet put a price on this recall, although it estimates the other recalls will cost about $2 billion. But the rating agency Moody's has owned that Toyota's credit rating could be downgraded. And Toyota's shares have lost one fifth of their market value since the crisis began. They were however up three percent today, helped by the perception that Toyota is finally tackling the crisis head on. But independent brokerage CLSA's auto analyst Chris Richter says he fears that Toyota's troubles aren't over yet.

Mr. CHRIS RICHTER (Auto Analyst, CLSA): If it comes out that there was inappropriate action by Toyota officials, that they knew about something and they didn't take the appropriate steps to deal with it, and that could take the share price lower as well.

LIM: Economics aside, the geopolitical ripples are still swelling. A congressional hearing is scheduled tomorrow, that's also when Japan's transport minister, Seiji Maehara, is due to meet the U.S. ambassador to Tokyo, John Roos. Maehara said each country needs to consider how to prevent the recalls from becoming a diplomatic problem.

Louisa Lim, NPR News, Tokyo. Transcript provided by NPR, Copyright NPR.