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Toyota Motor Corp President Akio Toyoda - Source: Reuters -
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Toyota Motor Corp's woes deepened ahead of its testimony to
Congress on safety issues, as it revealed it faces a US criminal
probe into the handling of its massive recalls, while Japan voiced
concern over the economic impact of the automakers' problems.
New US documents showed how the company beat back US safety
regulators' efforts for a wider probe in 2007 and disclosure of a
US Securities and Exchange Commission request for documents.
It all comes as Toyota's top executive prepared for a hearing on
Capitol Hill over unintended acceleration problems that have been
linked to at least five US deaths, with 29 other fatality reports
being examined.
In a gesture it said was intended to reassure customers, Toyota
said it would install brake-override systems on three more models
of vehicles already on US roads: the Tacoma truck going back to
2005 model year, the Venza crossover from 2009 and the Sequoia
SUV.
Shares of Toyota fell 0.5% to 3,325 yen on Tuesday in Tokyo,
matching the Nikkei 225's fall, suggesting little investor reaction
to news of the criminal investigation and the plan for an
additional brake override upgrade.
"Investors are not worried about such one-time costs. Instead they
welcome Toyota's efforts to restore confidence in its products and
its relations with the US government regardless of the costs," said
Yoshihiko Tabei, analyst at Kazaka Securities.
He said the earnings forecast Toyota gave on February 4 for the
year ending next month will likely be unaffected by the costs of
the recalls and voluntary upgrades, while investors are more
worried whether Toyota can revamp its brand and avoid a sales slump
next business year.
A Japanese government official expressed concern about the effect
Toyota's problems could have on Japan's exports.
"Strong growth in Asia-bound exports seems to be slowing, and we
also have to consider Toyota's recalls, so we've given a cautious
judgment on exports," Keisuke Tsumura, a parliamentary secretary on
economic affairs, said as the government issued a report on the
economy.
Toyota has recalled more than 8.5 million vehicles globally in
recent months for problems including sticky accelerators,
accelerators that can be pinned down by loose floor mats and a
braking glitch affecting its hybrid models.
It is also investigating reports of steering problems in the
Corolla, its second most popular US model.
Toyota's extra installation of the brake-override systems extends
the scope and cost of a recall that had already targeted five
models including the top-selling Camry.
Toyota said it would have the same safety technology on most new
models sold in the United States by the end of 2010.
Prelude to testimony
Akio Toyoda, who took the helm at the world No. 1 automaker last
June, is scheduled to testify before the US House Oversight and
Government Reform Committee.
In a preview of the line he could take in his testimony, Toyoda
said in a statement published in the Wall Street Journal that he
was committed to making sure that Toyota learned from the crisis
and changed its ways.
"It is clear to me that in recent years we didn't listen as
carefully as we should - or respond as quickly as we must - to our
customers' concerns," Toyoda said.
"While we investigated malfunctions in good faith, we focused
too narrowly on technical issues without taking full account of how
our customers use our vehicles."
The extended apology from Toyoda, a grandson of the company's
founder, came hours after Toyota said it had received a federal
grand jury subpoena from the US attorney's office in Manhattan on
February 8.
The automaker also said the SEC had asked for documents related to
unintended acceleration of Toyota vehicles and the company's
disclosure policies.
Toyota said it would cooperate with the investigations.
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