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Toyota Sees Sales Hit from Massive Recalls

February 2, 2010
2 min to read


NAGOYA, Japan – Toyota Motor Corp., reeling from massive recalls on three continents, may have trouble meeting its 2010 sales target because of quality problems, a top executive told Automotive News Europe.

Shinichi Sasaki, vice president in charge of quality, said it was still unclear what the financial impact of the recalls would be. But sales will likely take a hit.

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Since last fall, Toyota has recalled some 7.7 million vehicles in the United States, Canada, Europe and China to fix problems that could trigger unintended acceleration in its cars. The number recalled falls just short of the 7.8 million cars Toyota sold worldwide last year.

“The sales forecast is a concern for us,” Sasaki said today at the company's first press conference in Japan to address the rash of quality problems. In the past, Toyota has experienced a 20 percent fall off in sales in the month immediate following recalls, he said, and this time the impact is expected to be bigger.

Last month, Toyota forecast global sales to climb roughly 6 percent to 8.27 million vehicles. The figure includes sales of its truck subsidiary Hino and its small car affiliate Daihatsu.

Toyota will announce its third-quarter earnings on Thursday. All eyes will be on whether the world's biggest automaker changes its earnings or sales outlook.

The company's current forecast calls for a second straight year of red ink. But some analysts have been predicting a slim operating profit on the back of deep cost cutting measures.

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Sasaki downplayed criticism that quality control suffered because of Toyota's rapid overseas expansion in recent years. He also backed the performance of the U.S.-based company that supplied the faulty pedal mechanism triggering January's recall of 4.45 million vehicles.

“I don't think the expansion overseas affected quality whatsoever,” Sasaki said.

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