U.S. Transportation Secretary Ray LaHood stepped up pressure on Toyota Motor Corp. to fix defects that have caused the recall of millions of vehicles because they may suddenly accelerate, causing drivers to lose control.
LaHood told reporters in Washington he planned to call Toyota President Akio Toyoda "and explain to him that this is serious business." LaHood also told a House panel that drivers should stop driving the recalled vehicles, a comment he later called a misstatement.
The remarks underscore a growing crisis at Toyota that has caused it to lose $29.5 billion in market value since the current recalls began and has tarnished its reputation for quality. The U.S. also said today that it's looking into Toyota's Prius hybrid cars following an order to the company by Japan's government to investigate potential brake defects.
"Up until the last couple days we had all expected the consumer hit wouldn't be as serious as the media hit they were taking," said Wes Brown, an analyst with market research firm Iceology in Los Angeles. "Now things may start to shift that image hit to the consumer side that had been steadfastly loyal. They are really starting to run the risk of escalating things tremendously."
LaHood had told a congressional panel today that owners of recalled cars should "stop driving it and take it to a Toyota dealer."
"What I said in there was obviously a misstatement," LaHood told reporters later. "If you own one of these cars, take it to the dealer. If you are in doubt, take it to the dealer and have them fix it."
Shares Decline
Toyota said this week it would fix the defect by having dealers install shims in accelerators. LaHood said the government is investigating to see whether an electronic throttle system is the cause, as at least seven lawsuits allege.
Toyota's American depositary receipts, each representing two ordinary shares, fell $4.69, or 6 percent, to $73.49 at 4 p.m. in New York Stock Exchange composite trading. That was the lowest closing price for the ADRs since April.
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