The halting of Toyota Motors Corp. sales and production on some of its most popular models across North America is the result of an outsourcing effort that produced faulty gas pedals that have proven a propensity to stick in certain isolated incidents.
While there were only five incidents reported in Canada, Toyota issued a directive late Tuesday to its dealers across North America to halt sales immediately on eight of its most popular brands. It will also idle six of its North American factories, including those in Woodstock and Cambridge, Ont.
At this point, the automaker does not know how long the sales freeze will continue, but has told dealers they expect production to be halted for at least two weeks.
The Japanese carmaker also said Wednesday it was weighing whether a recall would be necessary in Europe, as well.
At issue is the recent outsourcing of the company’s accelerator pedals and pedal assembly to CTS Corporation, an Elkhart, Indiana-based parts marker, after demand for Toyota’s vehicles outstripped the capacity of the part’s original Japanese manufacturer, Denso Corp.
The CTS-produced pedals have demonstrated a propensity for sticking when exposed to condensation, those briefed on the nature of recall have said.
“The whole problem started with the outsourcing of the pedal and the pedal assembly,” said Vito Polera, fleet manager at Toronto’s Northwest Toyota dealership. “When [Denso] couldn’t meet the demand, Toyota farmed out to CTS, which is the affected part.”
CTS manufactured the part in question at its facility in Mississauga, Ont.
Mr. Polera said all that is required of the recalled vehicles is to inspect whether the pedal is a CTS pedal, and if they are, they are being removed regardless of whether they are sticking, and replaced with Denso ones. “There are no more CTS pedals going in the cars,” Mr. Polera said.
However, the shortage of Denso pedals persists, which is why Toyota is halting the production and sales of the affected models so that it can use the parts presently in its plants to replace the parts on the vehicles already on the road.
“They’re being more proactive than reactive, which is a good sign,” Mr. Polera said, adding, however, he is concerned about the lasting impact the recall will have on the brand and his dealership’s sales this year. “It’s not a positive, that’s for sure. It will affect us,” he added.
The sticking pedals have not caused any fatalities in Canada, but have potentially been linked to 19 fatalities in the United States.
Toyota’s recall surrounding accelerator pedals has broadened in size and scope in recent days.
Last Thursday, it said it would add another 2.3 million vehicles to the recall, after already saying 4.2 million vehicles were being impacted by unintended acceleration relating to floor mats.
The vehicles in question include certain models of its RAV4, Matrix, and Avalon, which are produced in Canada, as well as its Camry, Highlander, Tundra, Sequoia, and Avalon, which are produced in the United States.
In Canada, 270,000 vehicles are impacted by the recall, but the lasting damage to Toyota’s reputation for safety is incalculable at this point.
“This unprecedented automotive decision indicates how serious a safety problem this is,” said Michelle Krebs, senior analyst at Edmunds.com, in an email.
“We’ve gone from floor mats to recalls for wear items to a full shutdown, and I can’t help but think that the company’s credibility is being called into question,” she added.
Toyota is the biggest car company in the world one of the biggest car retailers in Canada, selling 205,115 vehicles in this country last year. Toyota also builds more cars in Canada and sells more Canadian-built cars here than any other manufacturer, or roughly 20,000 a month.
Shares in Toyota Motor Corp. fell nearly 8% in early morning trading on the New York Stock Exchange to $80.12 a piece as of 10:41 a.m. EST.
A dealer in Toronto Canada is stating the problem with the pedal is related to Toyota outsourcing to a company called CTS in Indiana.
