Toyota’s Ticking Time Bomb
Toyota Motor Corp. (NYSE:TM) announced Wednesday it will recall more than 70,000 vehicles due to engine bolts that could potentially break while the vehicles are in operation. The recall covers Toyota’s Vista, Corona, and Nadia models manufactured between December 1996 and December 2001.
The recall of a combined 70,410 units is in response to 107 reports of engine failure and other problems, Toyota said in a report filed with Japan’s Ministry of Land, Infrastructure, Transport, and Tourism. No accidents have yet been reported.
Meanwhile, first-quarter results show evidence of China’s slowing auto market. Vehicle sales in the country declined 3.4 percent year-over-year in the first quarter of 2012, with passenger car sales down 1.3 percent, according to an AFP report Wednesday. Total automobile sales for the quarter were 4.79 million units, according to a statement by the China Association of Automobile Manufacturers. Sales for March were up only 1 percent to 1.84 million.
Car sales in China have been on a downslide since last year when the government cut incentives and some cities restricted the number of vehicles allowed in order to help with traffic congestion and pollution problems. Sales increased only 2.5 percent to 18.51 million units nationwide in 2011, while 2010 saw a gain of more than 32 percent. Since March, sales have also been impacted by rising fuel prices, which have hit a three-year peak, according to a Shanghai Daily newspaper report.
However, some foreign carmakers in China saw healthy gains as car buyers showed a preference for overseas brands with their perceived higher quality. During the first three months of 2012, U.S. auto giant General Motors (NYSE:GM) set a quarterly record, selling 745,152 vehicles in China. Volkswagon and BMW also had record sales.