Toyota's February Sales Suffer Over Safety Concerns

Toyota Motor's (TM) recall woes have put a dent in sales. The Japanese automaker reported that sales fell 8.7% in February as production and sales halts combined with consumer concerns about safety recalls took a toll on demand. Several of those recalls involve popular Camry sedans, which recorded a 20% drop in sales during February, the first full sales month following the latest recall of vehicles for unintended acceleration in late January.

Toyota, which halted sales and production in North America of eight vehicles during the first week of February, said sales within its namesake Toyota brand fell 10.6%. But sales at its luxury Lexus brand actually rose 5.2% during the month, an especially surprising outcome given renewed publicity surrounding the deaths last August of a California highway patrol officer and his family, who were killed after the officer was unable to bring their speeding Lexus ES350 sedan under control, resulting in a fiery crash.

The company's entry-level Scion brand, which accounts for only a fraction of Toyota sales, had far fewer buyers, selling just 3,027 vehicles during February, an 18.2% drop. For the month, Toyota sold just 100,027 vehicles. Still, that's a slight improvement over January, when monthly sales fell to under 100,000 for the first time in more than a decade.

Back to Washington

Toyota announced its February sales results shortly before company executives appeared before a Senate committee to explain the company's reaction to reports of unintended acceleration in its vehicles. Lawmakers want to know why Toyota hasn't acted more responsively to Toyota owners' reports of problems. Further, members of Congress wonder whether Toyota is being completely forthcoming because information given to the National Highway Traffic Safety Administration runs counter to the company's claims that unintended acceleration is caused either by bulky floor mats or "sticky" gas pedals.

Reports and testimony last week before a House committee suggest the problem may be electronic in nature. Indeed, speaking before the same House panel last week, James Lentz, president of Toyota's U.S. sales division, testified that a software glitch could be responsible for the sudden acceleration problem. But Tokyo-based officials have stonewalled, saying Toyota's electronic throttle-control system isn't the source of the problem.