Toyota halts sales of Lexus SUV labelled 'safety risk'

Toyota Motor Corp asked Lexus dealers in North America to halt sales of GX 460 sport-utility vehicles (SUVs) after Consumer Reports labelled the model a “safety risk,” the magazine’s first such designation in nine years. “We are taking the situation with the GX 460 very seriously and are determined to identify and correct the issue Consumer Reports identified,” Mark Templin, US general manager for the luxury brand, said in an e-mail.

The 2010 GX 460 received the designation and a “don’t buy” recommendation because emergency driving tests indicated it may be prone to rollover accidents, Consumer Reports said yesterday. The non-profit magazine, published by Yonkers, New York-based Consumers Union, said it hadn’t deemed any other vehicle a safety risk since 2001.

 

The rating complicates Toyota’s efforts to repair its image after recalling more than 8 million vehicles worldwide for defects linked to unintended acceleration and brakes, actions that led to US congressional hearings and a rebuke by Transportation Secretary Ray LaHood.

The US assessed a $16.4 million penalty against Toyota for delaying a recall of sticky accelerator pedals and said there may be more fines.

“Consumer Reports is a large and noteworthy publication with legions of fans, and therefore we can expect the ‘headline’ effect will take another round’s toll, much to Toyota’s chagrin,” James Bell, an executive market analyst for Kelley Blue Book, said in an e-mail. The magazine’s report “may ‘scratch the scab’ before healing was complete,” Bell said.

‘Fishtail event’
Toyota was unchanged at 3,705 yen as of 12:38 pm in Tokyo trading, compared with a 0.3 per cent gain in the Nikkei 225 Stock Average.

The GX’s rear end “slid out until the vehicle was almost sideways before the electronic stability control system was able to regain control” at a Connecticut test track, the magazine said. “In real-world driving, that situation could lead to a rollover accident, which could cause serious injury or death,” Consumer Reports said.

Toyota, the world’s largest carmaker, said its engineers will review the magazine’s findings and try to duplicate the test results. A decision on whether to conduct a recall would follow, company spokeswoman Ririko Takeuchi said in Tokyo.

The US National Highway Traffic Safety Administration (NHTSA) said it’s in the process of checking the GX 460 to ensure compliance with standards for electronic stability control, which “should prevent the kind of fishtail event described in the CU’s tests.” Drivers of the Lexus SUV should “use care and caution,” the agency said in a statement yesterday.

GX sales
NHTSA’s database of complaints by consumers showed no entries related to that Lexus model as of late Monday.

Toyota has sold 5,400 units of the model in North America since it was introduced in November. The company has also sold 620 in the Middle East, Russia, and the Oceania region. Toyota hasn’t decided its response in those regions, Takeuchi said.

Toyota’s US sales rose 41 per cent in March after two months of declines, as the automaker offered incentives such as no-interest loans and discount leases. The March gains included a 42 per cent increase for Lexus. GX sales tripled last month to 1,785 and rose almost threefold to 4,787 in the first quarter.

The GX has a starting price of about $52,000, according to Lexus’s website. The model accounted for 10 per cent of Lexus brand sales in the first three months of 2010, according to Edmunds.com.

‘Oversteer’ test
Consumer Reports checked the initial findings in the “lift-off oversteer” test of the GX by repeating it on a second vehicle, said Douglas Love, a spokesman for the magazine. In the oversteer test, “as the vehicle is driven through a turn, the driver quickly lifts his foot off the accelerator pedal to see how the vehicle reacts,” Consumer Reports said.

The publication has more than 7 million subscribers to its print and Web versions and has been cited by Toyota, Honda Motor Co and other automakers as highly influential with US consumers. Unlike other reviewers of vehicle quality, Consumer Reports doesn’t allow companies to use its assessments in advertising.

The magazine’s safety ratings have caused other automakers to sue Consumers Union. After Isuzu Motors sued over a “not acceptable” rating on its 1996 Trooper SUV, a federal jury in Los Angeles in 2000 ruled that Consumers Union hadn’t libeled or defamed the company.

Suzuki, Mitsubishi
A Suzuki Motor Corp lawsuit over a Consumers Union rating of the Samurai small SUV was dismissed in 2000 by a federal judge in Santa Ana, California.

Mitsubishi Motors Corp in 2001 attacked the magazine’s “not acceptable” safety rating on the Montero Limited SUV as a misrepresentation. Consumers Union stood by its tests, in which it said the vehicle tipped onto two wheels in turns.

Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 57 individual suits claiming personal injuries or deaths caused by sudden- acceleration incidents. The lawsuits will be combined in a federal court in Santa Ana, California, a panel of judges said earlier this month.

The company’s president, Akio Toyoda, suggested his predecessor Katsuaki Watanabe leave Toyota in the wake of its recalls, the Wall Street Journal reported earlier, citing an unidentified executive. Watanabe refused, the report said.

Former President Hiroshi Okuda has said Toyoda “needs to go,” WSJ also reported.

Toyota’s Takeuchi declined to immediately comment on the report.