Consumer Reports says Toyota reliability slips

By Kevin Krolicki and Jui Chakravorty

DETROIT (Reuters) - Consumer Reports said on Tuesday it was reversing a practice of recommending all new Toyota cars and trucks after two models earned below-average rankings in a closely watched reliability study.

The reversal was the latest setback for Toyota Motor Corp. (7203.T) after a period of fast growth in the United States that has made it the No. 2 player in the world's largest auto market.

Toyota's U.S. sales slipped 1 percent in September for the third consecutive month of declining results. Meanwhile, high-ranking executives have defected recently to U.S. automakers and environmental groups have criticized Toyota for resisting stringent increases in fleetwide fuel economy.

In recent years, Japanese auto brands, led by Toyota, have dominated Consumer Reports' influential study of the most reliable new vehicles.

Although Toyota ranked third in reliability behind only Honda Motor Co (7267.T) and Fuji Heavy Industries Ltd's (7270.T) Subaru, Consumer Reports also found two Toyota models had "below average" predicted reliability.

Those two models were the V-6 version of Toyota's flagship Camry sedan and the four-wheel-drive, V-8 version of its new Tundra pickup truck.

"Consumer Reports will no longer recommend any new or redesigned Toyota-built models without reliability data on a specific design," the publication said in a statement. "Previously, new and redesigned models were recommended because of the automaker's excellent track record."

Besides its influence with car shoppers, the annual study is used by major automakers as a proxy for their performance in improving and maintaining vehicle quality.

"None of our internal data points to customer dissatisfaction with any of those models," Toyota spokesman John McCandless told Reuters.

"We look forward to analyzing the data and we'll sit down with Consumer Reports and take it from there," he said.

The Japanese automaker's fast growth since 2000, when it had less than 10 percent of the U.S. market, has left it facing new pressure and scrutiny.

"Toyota has had a lot of product introductions, they've been pushing up volumes," said David Champion, director of auto testing for Consumer Reports, on the sidelines of an event at which he briefed reporters on the report.

"I'm not sure of the root cause of the problem, but maybe that's having some effect on their quality," he added.

In the first nine months of this year, Toyota had a 16.2 percent share of the U.S. market for new cars and light trucks, behind only General Motors Corp (GM.N) at 23.8 percent.

High-ranking executives who have defected from Toyota in recent months include Toyota's former North American chief, Jim Press, who left the automaker after a 37-year career to become vice chairman at Chrysler LLC.