Toyota president apologises for recall

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Akio Toyoda, president of Toyota Motor, apologised on Friday for defects that have resulted in the Japanese carmaker's recallof more than 8m of its cars, saying he would create a "global quality task force" to improve standards at the group.

"I personally regret that we have caused worry for so many people," he said at a news conference in Nagoya, near the company's headquarters, adding: "I apologise from my heart."

Mr Toyoda, who had been criticised for not addressing the defect problem ,publicly since the first of several recalls was announced in November, said the issue had created a "crisis situation" for Toyota, though he offered little explanation for what went wrong.

On Thursday the world's biggest carmaker put the cost of fixing millions of faulty accelerator pedals and floor mats at Y100bn ($1.1bn), while freezing the production and sale of eight affected models was projected to cost it an additional Y70-Y80bn this quarter.

A US Congressional committee has scheduled hearings into how Toyota has responded to the defects, which have been linked to crashes.

Mr Toyoda said the company was still weighing whether to expand its recent recalls to include Prius hybrids afflicted by a design problem that could impede their braking on icy or uneven roads.

Also on Friday Standard & Poor's, the credit rating agency said it had put the carmaker's double A debt rating under review with "negative" implications, citing concerns about quality issues.

The rating company said in a statement that the move reflected its increased concern over the potential negative impact on Toyota's business risk Profile of unfolding developments related to recent quality-related issues.

However, the carmaker's shares became one of the few gainers on the benchmark Nikkei on Friday in spite of local media reports that it was considering a recall of its third-generation Prius hybrid cars. Its shares rose 1.1 per cent to Y3,315 as investors were encouraged by its revised earnings forecast. However, Toyota stock has lost nearly a quarter of their value since the company acknowledged the accelerator pedal fault on January 21.

The US National Highway Traffic Safety Administration on Thursday said that it had received 124 complaints about braking problems on the 2010 model of the Prius, including four relating to crashes.

It announced the investigation after Toyota's announcement earlier yesterdaydisclosurethat it had identified a design problem with the Prius that could affect the performance of the brakes on icy or uneven roads. Toyota said that it would co-operate fully with the investigation.

The world's biggest carmaker has recalled more than 8m vehicles since November to fix accelerator pedals and out-of-position floor mats, which have been linked to crashes.

The company said, however, that it expected to return to profit in the year to March as a result of government scrappage incentives that have lifted car sales worldwide.

Hiroyuki Yokoyama, Toyota managing director responsible for quality control, said that it had not been decided whether to issue a broad recall of the Prius and that the brake problem was not considered a safety threat.

The issue involved software that controlled the car's anti-lock braking system. When the ABS was engaged, some drivers might feel a short "pause" when the car's brakes switched from "regenerative" mode to standard hydraulic braking.

Toyota engineers had reprogrammed the ABS software last month after dealers and the Japanese transport ministry received complaints, he said. For cars already on the road, Toyota would for now perform updates only on request.

Toyota's projected return to profit appeared at odds with its recent difficulties. The company expects to earn Y80bn in the 12 months ending March 31, an improvement over its November forecast of a Y200bn net loss.

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