Toyota Recalls 550,000 Cars Over Steering Issue

Toyota Motor Corp. (NYSE:TM) said on Wednesday that the company is recalling about 550,000 cars globally because of certain steering related issues, which are making the vehicles harder to steer.

Dion Corbett, a spokesman for Toyota said that this recall will affect 25,000 in New Zealand and Australia, 447,000 vehicles in North America and also 38,000 cars in Japan. Most of the vehicles that are being recalled are from the United States. Also included in the recall are 14,000 vehicles in Asia excluding Japan along with some 14,000 in Europe and another 14,000 in the Middle East.

Toyota’s reputation has experienced a massive blow over the last two years because of several massive vehicle recalls that have distended to around 14 million over time, including millions of vehicles recalled in 2010 relating to acceleration issues. The car manufacturer faced damage lawsuits and persistent doubts in the United States regarding whether Toyota had been transparent enough about the woes linked to its recalls.

Mr. Corbett said that they were no accidents or injuries reported because of the concerned issues. Toyota has been attempting to communicate significantly with its customers and empower regional operations to make safety decisions outside Japan.

The news relating recalls came following the announcement of Japan’s largest car manufacturer’s third quarter earnings, which dropped 18.5 percent to $1 billion on dipping sales caused due to issues in parts supplies because of the tsunami disaster that struck in parts of Northeastern Japan. Toyota is now facing similar uncertainties because of floods in Thailand, where its three supply plants are based along with many suppliers.

Toyota’s United States sales unit in a press conference said that Toyota’s latest recall of vehicles was because of the possibility that the crankshafts outer ring in the engine might be misaligned with its inner ring, resulting in lighting up a warning signal or a noise. If this is left not unresolved, then the belt of the power steering might detach itself from the pulley, suddenly making it more difficult to steer the vehicle.

Toyota in U.S. is recalling close to 283,200 cars, including the Highlander, the 2004 and 2005 Camry, Solar and Sienna, the 2006 Highlander and the 2004 Avalon. Toyota’s recall of a total of 137,000 Lexus includes the 2004 and 2005 models RX400h, ES330 and RX330.

The process of recall notifications differs from county to country. In the United States the car maker will mail the owners a notification to get themselves an appointment fixed with an authorized dealer in order to get their vehicle inspected once the replacement parts are manufactured sufficiently. It is uncertain how much will these recalls cost Toyota to fix.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.