TOKYO/WASHINGTON: Toyota Motor Corp said it would call in nearly half a million new Prius and other hybrid cars for braking problems, the third recall in a spiraling safety crisis at the world's biggest carmaker.
US authorities stepped up scrutiny of Toyota, whose reputation was already on the line over fixes to more than 8 million vehicles worldwide for slipping floormats and sticky accelerator pedals.
Toyota on Tuesday ended days of speculation and recalled more than 400,000 hybrid models, including the latest version of its iconic Prius, to rectify a problem with the regenerative brakes that help charge the cars' electric batteries.
The move came a day before Toyota's North America head Yoshimi Inaba was due to testify about the recall process to Congress before the House Oversight Committee in Washington.
Toyota President Akio Toyoda, still waiting for a fix on his own Prius, said he may travel to the United States next week to tackle criticism that his company moved too slowly on earlier recalls.
In Japan, Transport Minister Seiji Maehara added to US criticism, telling Toyoda he had hoped for swifter action.
"Recalling defective products is important, but each country needs to consider how to prevent this from becoming a diplomatic problem," he told reporters, adding the US response had been "extremely measured" so far.
The US government will continue its investigation into 2010 Prius hybrids even though Toyota has recalled the model, the Transportation Department said on Tuesday. Ratings agency Moody's said it was reviewing Toyota's "AA1" rating for a possible downgrade.
Toyota also faces potential litigation over 19 deaths and numerous injuries in crashes linked to the acceleration problems as well as class-action lawsuits over the brake problems with the Prius.
Shares in Toyota, which lost about a fifth of their value since late January, closed up 2.9 percent as the market welcomed signs that the problems were finally being addressed.
But the carmaker faces long-term fallout from the crisis, analysts said.
"The wave of media and government attention will not subside quickly, with lasting damage now looking unavoidable," said IHS Global Insight analyst Paul Newton.
Toyota is likely to lose over 10,000 sales for both January and February, Newton predicted.
The effects in the coming months will depend on how quickly Toyota can get a fix into production," he said. "The longer-term effects from lost sales to younger buyers could be much more serious, however," he added.
The latest model Prius is sold in some 60 countries and is a hugely important model for Toyota, which is betting on the hybrid to maintain its lead in low-emission vehicles. The Prius was Japan's top-selling car last year, a first for a hybrid.
"Toyota has been, beyond any doubt, the top player in the hybrid car segment and the fact that Prius and other hybrid models will be part of this massive recall significantly dents its image" and opens the door for competitors, said Suh Sung-moon, an analyst at Korea Investment & Securities in Seoul.
Toyota said it was recalling a total of 437,000 units of its 2010 Prius, Sai, Prius PHV (plug-in hybrid) and Lexus HS250h hybrids globally, including 155,000 in North America, 223,000 in Japan and 53,000 in Europe.
Toyota said repairs to fix the problem would take around 40 minutes per car and, in the meantime, pressing hard on the brake pedal would stop the vehicle.
Some owners of the third-generation Prius have complained that on bumpy roads and ice, the brakes seem to slip and the car lurches forward before the traditional brakes engage.
"Let me assure everyone that we will redouble our commitment to quality as a lifeline of our company,” Toyoda told a news conference in Tokyo.
"With myself taking the lead, and by keeping to the 'genchi genbutsu' principle, all of us at Toyota will tackle the issue in close cooperation with dealers and suppliers together, we will do everything in our power to regain the confidence of our customers," he said, first in Japanese, then in English.
Genchi genbutsu, meaning "go and see,” is one of the five principles in Toyota's much-emulated management and production philosophy.
