Toyota recall woes. While Toyota has been the benchmark for high standards for decades, the company is facing a variety of sales and service issues due to major recalls of 11 models.
Toyota posted a significant earnings increase for the quarter ending Dec. 31. However, it is estimated that it will cost the automaker a minimum of $2 billion in lost sales and the expense of replacing faulty parts on various models over the next several months.
And the National Highway Traffic Safety Administration (NHTSA) is investigating uncontrolled acceleration issues that may have played a role in several vehicle accidents in recent years.
With floor mat and gas pedal recalls in January, followed by Prius brake system recalls in February, more than 4 million vehicles have been recalled in North America by Toyota (more than 9 million worldwide), and the company halted sales of most models until the fix is accomplished at the dealer level.
CTS Automotive Products is working around the clock to modify, manufacture, and distribute replacement gas pedals that have begun arriving at dealerships. The process may take months to complete due to parts supply and service scheduling at Toyota stores across the country.
At press time, Toyota was notifying dealers that the process for replacing or repairing faulty Prius brakes is not yet in place because a NHTSA investigation of those systems is ongoing.
Toyota has expressed global apologies from Akio Toyoda, Toyota Motor Corp. president and chief executive in Japan, and from Jim Lentz, Toyota Motor Sales USA CEO. Recall letters have been sent to most Toyota owners, and dealers are trained and prepared to handle recall issues.
While this is a sizable vehicle recall, most automakers who have experienced major recalls over the past 30 years have survived, and recall situations have not had long-term effects on sales.
Cummins & Chrysler continue marriage. A Feb. 3 announcement by Cummins Inc. and Chrysler Group LLC confirms that the two will continue a multiyear relationship whereby Cummins will supply the vehicle manufacturer with 6.-7-liter Turbo Diesel engines for Ram Heavy-Duty pickups and Chassis Cab trucks. This extends the 21-year history of Cummins providing Chrysler with engines.
Since 1989, Cummins has produced more than 1.7 million Cummins Turbo Diesel engines for Dodge Ram Heavy-Duty trucks. The first Turbo Diesel was placed in a 1989 model Dodge Ram that had an estimated sales goal of 5,000 of the engines. Actual sales exceeded 20,000 in the first year.
That first Cummins Turbo Diesel engine was a 5.9-liter rated at 160 HP and 400 lb.-ft. of torque. The 6.7-liter engine delivers 350 HP and 650 lb.-ft. of torque.
In 2007, Dodge and Cummins produced the cleanest heavy-duty diesel pickup in the market by meeting U.S. Environmental Protection Agency 2010 emission levels a full three years in advance.
Smaller cars will abound. The small-car market in the U.S., including crossovers, will increase to 36 percent in 2013, said George Pipas, Ford's sales analyst, during a speech to automotive journalists at the Portland, Ore., auto show.
"While the small-car share in 2003 was 21 percent, it rose to 31 percent in 2008," Pipas said. Downsizing of houses and cars will continue through the decade, he said, and this year, 49 percent of first-time buyers will go to the small-car segment.
"The pace of small cars picked up in 2007 both in North America and Europe, where that segment will represent 73 percent of sales in 2013," Pipas said. "In 2004, the market was dominated by trucks and truck-based SUVs, but that segment shrunk from 70 to 40 percent by 2009."
