New "Toyota" Car Troubles Threatened Billions of Losses and Loss of Reputation

Millions of "Toyota" cars (both already sold and still waiting for customers) throughout the world require a quick repair - it will cost the company up to $2 billion.

Unreliable acceleration pedal led the Japanese manufacturer to return more than 4.5 million cars to workshops worldwide. On Thursday, "Toyota" has officially announced that this will cost at least 1.4 billion Euros ($1.9 billion).

Various market analysts predict similar numbers of costs. In addition, the producer will suffer losses from the declining sales. "Toyota's" car sales in the U.S. this year fell by 16-19 percent - up to 99 thousand cars, which is the lowest rate since 1998.

"Toyota" has found a cause for the acceleration pedal problem, which occurred in their cars. It was the water condensate. The problem occurs when, in the cold season, the heating is switched on and thus increases the friction within the mechanism. The problem should disappear by adding an appropriate intermediate.

In response to a runaway situation on Friday, "Toyota Motor" president Akio Toyoda held a press conference in Japan and for the first time publicly apologized to the owners of the cars for any inconvenience that this has been set for the compulsory maintenance.

The car manufacturer is finally pleased that it found the reason why the acceleration pedal hardly or even did not return to its' original position. On the first of February, "Toyota" announced a compulsory automobile repair in the United States, Europe, China, Africa, Latin America and the Middle East.

Despite the direct losses due to this problem, the company is very seriously concerned about its reputation. Up to now, the company had an excellent reputation but customers may be not so reliant anymore. Especially if it turns out that the company knew about this problem is 2007 and continued to distribute the models with a defect. It is alleged that the previous Toyota car tests showed that the speed pedal can break.

Despite these troubles, the world's largest car manufacturer expects to end the following financial year in profit. Company forecast that on 31 March, the end of the financial year, its net profit will reach 80 billion yen (864 million U.S. dollars).

"Toyota's" sales in the previous quarter were 2.07 million cars - 227 thousand more than in a previous year. The company's net profit last quarter was 1.2 billion U.S. dollars.

Pedal fix video.
In-Depth analysis about the malfunction in this video.

Source: http://pressroom.toyota.com/pr/tms/toyota/toyota-consumer-safety-advisory-102572.aspx