Toyota now has two major recalls to contend with- both for similar problems- and is now expanding its original recall to include an additional 1 million vehicles.

Earlier this week, Toyota announced a voluntary recall of certain Toyota Avalons, Camrys, Corollas, Corolla Matrixes, Highlanders, RAV4s, Sequoias and Tundras. The recall involved the potential for the accelerator pedal to become slow to respond and even stuck in the open position under certain conditions. It affected 2.3 million vehicles and has caused Toyota to halt production and sales of those vehicles.

Last October, Toyota launched its largest-ever recall of some 4.3 million vehicles due to the potential for the floormat to entrap the accelerator pedal and cause it to get stuck open. The initial recall affected certain Lexus ES350 and IS vehicles as well as certain Avalons, Camrys, Prius, Tacomas and Tundras. A fix for that recall has been found and owners are being notified.

With the additional 1.1 million vehicles added to that recall, it brings the total for the floormat recall to 5.4 million vehicles. Add the pedal recall of 2.3 million vehicles and Toyota is facing a massive recall headache of 7.7 million. Since most of the vehicles affected by the new recall are also subject to the older recall, it amounts to nearly 6 million vehicles affected by one or both issues.

GM and Ford are adding to Toyota’s woes by offering up to $1,000 in incentives for Toyota owners interested in trading in their vehicle. Coincidentally, GM’s Pontiac Vibe is manufactured in a joint venture with Toyota and is also affected by the recall.

Financially, it’s all a big hit for Toyota at a bad time. Just as Toyota had announced expectations for modest sales increases in the coming year, its image has taken a major beating. In addition to the cost of repairing all vehicles affected by the recall- and recalls in other countries for the same reasons- Toyota is facing a factory shutdown of five plants that is expected to cost the company between Y40 billion and Y45 billion each week (a staggering $442.64 million – $498.51 million- nearly half a billion dollars- weekly).

Also affected are Toyota’s stock prices- which have dropped 15% over the past 5 days, erasing $24 billion in value.

This entry was posted on Thursday, January 28th, 2010 at 6:33 am and is filed under Cars, Financial, Lexus, Recalls, Rumors, Safety, Sales, Scion, Toyoland, Toyota, Trucks, Vehicles in General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.