Toyota suspends US sales of SUV

Toyota has suspended sales of a new Lexus SUV in the US market to investigate the risk for rollover accidents in the latest blow…

Toyota has suspended sales of a new Lexus SUV in the US market to investigate the risk for rollover accidents in the latest blow to the reputation of the car maker.

Toyota took the unusual action of stopping sales of the 2010 Lexus GX 460 after Consumer Reports urged shoppers not to buy the sport utility vehicle, calling it a "safety risk" because of a potential handling problem in certain turns.

Shares of Toyota, which have are up 13 per cent since early February, opened lower but were up less than half a per cent in morning trade in Tokyo today. The stock remains down 11 per cent from late January when the first in a series of large recalls was announced.

"Our understanding is that there is no problem with models other than the GX 460, since we have not received reports of problems," said Toyota spokeswoman Mieko Iwasaki.

Toyota said its engineers were "vigorously testing" the SUV to identify the risk cited by Consumer Reports. The magazine said its own testing found the Lexus was prone to slide when driven in sweeping turns.

Consumer Reports said the sliding could cause rollover accidents resulting in serious injury or death. It said it knew of no reports of such accidents.

It said the risk of a rollover accident in the GX 460 was significant because it is a tall SUV with a high centre of gravity. No other SUV had slid as far as the Lexus in its recent testing, including the Toyota 4Runner, the magazine said.

Toyota has sold about 5,400 of the Lexus GX 460 SUVs in the four months since it has been on the market. The GX, which is based on the same platform as the off-road ready Toyota 4Runner, starts at just over $50,000.

A similar SUV has been sold in Japan and elsewhere as the Prado although the new version of the Lexus GX is now substantially different, Toyota's Iwasaki said.

The carmaker said it would provide a loaner vehicle until a remedy is available to owners who are concerned.

"This is the last thing Toyota needs right now," said IHS Global Insight analyst Aaron Bragman, who said it was more likely that Toyota would have to continue to resort to steep discounts of up to $5,000 to win back consumers.

Toyota has struggled under massive recalls due to defective sticky accelerator pedals and the potential for floormats to entrap the accelerator. The sticky accelerator pedals also led to US sales and production halts.

US safety regulators have proposed a record $16.4 million fine against Toyota, the highest allowed, accusing the automaker of knowingly delaying a recall over the defective accelerator pedals and may seek more penalties. The recalls also sparked congressional hearings and numerous lawsuits.

Toyota's US sales fell 16 per cent year-over-year in January and 9 per cent in February before rising 41 per cent in March under unprecedented incentives.

Reuters