* Second multimillion-car recall in two months
* Defects in steering component, water pump
* Recall cost seen 30-40 bln yen, no huge brand impact
* No accidents from defects, each can be repaired in an hour
By Yoko Kubota
TOKYO, Nov 14 Toyota Motor Corp said it
will recall 2.77 million vehicles worldwide, including some of
its popular Prius hybrid cars, for steering and water pump
problems in the carmaker's second multimillion-vehicle recall in
a little over a month.
The defects, which Toyota said had caused no accidents and
could each be fixed in an hour or so, could cost hundreds of
millions of dollars to repair, according Deutsche Securities
autos analyst Kurt Sanger.
While the recall is widespread, the flaws are less serious
and any damage to Toyota's reputation would likely be limited
compared with massive recalls in 2009 to 2011 when unintended
acceleration problems in Toyota vehicles were the suspected
cause of fatal crashes in the United States.
Toyota this year recaptured the crown of the world's top
automaker after last year's natural disasters, which temporarily
disrupted production in Japan and Thailand, had knocked it from
the top spot in 2011.
Toyota is recalling 2.76 million vehicles worldwide to fix a
steering component that could be damaged by wear and tear, and
630,000 gasoline-electric hybrid vehicles to replace water
pumps, company spokesman Joichi Tachikawa said. Many vehicles
are targeted by both recalls, resulting in overlap.
Deutsche Securities analyst Sanger said the extent of the
recall suggested a more aggressive stance by the company to
address defects after its recall crisis a few years ago.
"They seem to continue to be obsessively monitoring these
things and looking for potential problems before they arise,"
Toyota gave no indication of the likely cost of the latest
recall, but Sanger estimated that, including parts and labour,
it could amount to 30 b i llion to 40 billion yen ($380-500
"That's a decent range of financial impact, we assume. There
doesn't seem to be much brand risk around this, given that there
haven't been injuries and excessive complaining leading up to
the product action and recall."
Toyota has faced a long battle to restore its image since
problems with unintended acceleration in its vehicles led to a
series of recalls of more than 10 million vehicles worldwide
from 2009 to 2011, damaging its reputation for quality.
Discussion of the company's quality issues re-emerged with
last month's recall of more than 7.4 million vehicles to fix
power window switches, the industry's biggest single recall
since Ford Motor Co took 8 million vehicles off the road
Two weeks later, Tokai Rika, a supplier of auto
parts to Toyota, booked an extraordinary loss of 15 billion yen
to pay for problematic parts connected with a recall.
Shares in Toyota ended down 0.8 percent at 3,060 yen on
Wednesday, underperforming the Nikkei benchmark index,
which ended flat.
More than half of the vehicles in the latest recall, or 1.5
million, are in Japan, making this Toyota's biggest single
recall in its home market. It is also recalling 670,000 vehicles
in the United States and 496,000 in Europe.
The recall covers certain Corolla compact models made from
2000 to 2006 and second-generation Prius cars made between 2004
and 2011. Toyota has sold about 3.3 million Prius hybrid
vehicles globally since the car went on sale in December 1997.
Analysts have cited Toyota's recovery from its 2009 recall
fiasco and last year's natural disasters as signs of resilience.
It has also been hit by a plunge in car sales in China since
September, when anti-Japanese protests erupted during a
territorial spat between Tokyo and Beijing, but nevertheless
raised its full-year net profit forecast this month to $9.7
billion as overall sales remained solid.