Toyota Motor Corp.’s recall of 1.7 million cars in Europe will prove “very tough” for sales in Germany, a market already set for a slump after government subsidies ended, the automaker’s top European executive said.
"Customers will no doubt react" to the recall and the expiration of trade-in incentives, Tadashi Arashima, chief executive officer of Toyota's European operations, said today in an interview in Berlin. “Things will be very tough for us in Germany."
The world’s biggest carmaker is bracing for a "visible" sales decline in western Europe, Arashima said. Toyota, including its Lexus brand, had 5 percent of the region’s market last year, with sales of 677,070 cars, according to the European Automobile Manufacturers' Association. Market leader Volkswagen AG sold 2.9 million vehicles.
Arashima declined to give specific sales forecasts. At the Geneva auto show this week, Toyota City, Japan-based Toyota predicted that Germany's auto market, Europe’s biggest, may shrink by 1 million vehicles in 2010.
In the first two months, deliveries in the U.K. slid 4.9 percent, while sales in Germany dropped 56 percent, figures compiled by national auto association show. Toyota’s recall in Europe, announced at the end of January, affects cars with accelerator pedals may get stuck in a depressed position.
Toyota has recalled about 8 million vehicles globally to modify floor mats and gas pedals blamed for unintended acceleration. Regulators are investigating whether electronic systems contributed to the incidents, while Toyota has said there is no evidence that’s the case.
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