GS69

Toyota May Delay Launch of New Models
Report: Recalls and quality issues may slow rollout by as much as six months.
August 25 2006: 6:08 AM EDT

TOKYO (Reuters) -- Toyota Motor Corp., Japan's biggest auto maker, is considering delaying the introduction of some new models by as much as half a year amid a series of recalls and quality problems, the Wall Street Journal said Friday, citing people familiar with the matter.

Toyota, which has built its reputation on offering safe and reliable cars at reasonable prices, is plagued with a rise in vehicle recalls and faces a legal probe into its past recall practice.

"I have given an order to pay more attention on safety issues, but we as a company are not stalling," Toyota President Katsuaki Watanabe told reporters on the sidelines of a safety technology briefing in Shizuoka Prefecture, west of Tokyo.

"We always work flexibly on each model though," he added.

On the same day, China's quality watchdog said Toyota would recall over 20,000 locally made cars in the country due to a faulty rubber seal used to fix the windscreen, although no accidents or injuries had yet been linked to the defect.

The paper said Toyota is considering adding as much as three to six months to development lead time, which is usually two to three years to improve quality, affecting a relatively wide range of projects.

The next Sienna minivan, Solara sports coupe and Avalon sedan are among models that could be affected, it said.

Toyota spokeswoman Shiori Hashimoto said the company would not comment on its strategy and the timing of product introductions.

So far this year, Toyota has recalled more than one million vehicles in Japan and 627,000 units in the United States, its single-biggest market.

It is also being investigated by prosecutors in Kumamoto, southern Japan, over whether its quality-control managers wrongly delayed a recall filing that could have prevented a road accident in 2004 that injured a couple and their three young children.

Mitsubishi UFJ Securities analyst Shotaro Noguchi said financial impact from the quality issues would likely be limited for Toyota.

"We are not expecting any surprise in earnings from all this," he said. "It is a fact that Toyota has been busy in investments, so it is good to take time to check."

Toyota has forecast group-based global sales of 8.85 million units and production of 9.06 million units for 2006 -- figures that could soon see it overtake General Motors Corp. as the world's biggest auto maker.

Vehicle recalls have been on the rise at most auto makers as they use common components across more models to save costs, and pile on advanced features requiring more electronics parts to add value to their products. Shares in Toyota fell 1 percent to close at ¥ 6,250, underperforming a 0.1 percent decrease in the Nikkei average.

rominl

iTrader: (4)

great move. i like how toyota sits back and go through analysis to preserve their name and reliability / quality, rather than rushing everything out in attempt to compete to other companies. in the end, some people would say they are "late", but in the long run i think more people would appreciate it

manila_boy

patience is one of the ingredient of "Quality"

MSMLexIS

Good to here there going to do something about the recalls theyve had recently. Too many recalls will start hurting there reliability.

PhilipMSPT

iTrader: (5)

Too bad they only mentioned the Sienna, Solara, and Avalon.

I would have love to hear about other projects they have coming along...

jimxo

It's about time. Toyota has been stamping out some real average built cars.

Such as Avalon, Camry, Sienna best sellers but not as good as the older ones.

TRDFantasy

Hopefully overall quality and overall interior materials will become a top priority now, and I am confident Toyota will once again increase the gap over the competition when it comes to quality and interiors.

rominl

iTrader: (4)

i think we am still on route to get sienna some time in the future. it's good to see them make sure they make that car right