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Toyota: R9.5bn bill for mat recall

2012-12-27 12:46

MAT TRAP: Toyota has agreed to pay out a vast sum to car owners affected by recalls involving floor mats.

Mira Oberman

CHICAGO, Illinois - Toyota has agreed to pay nearly R9.5-billion to settle a class-action lawsuit launched by US vehicle owners affected by a series of mass recalls.

Toyota refused blame but agreed to compensate owners who argued that the value of about 16.3-million vehicles took a hit from a number of road incidents allegedly caused by Toyota vehicles speeding out of control in 2009.

The deal will cover the cost of installing a free brake over-ride system in about 2.7-million vehicles and give cash payments to those who sold their vehicles after the recalls or who own vehicles ineligible for the over-ride system.

PROBLEM MISHANDLED

Once lauded for its quality control, Toyota was forced into damage control after recalling millions of vehicles to correct a series of serious defects. Earlier in 2012 it added two models to the controversial 2009/10 recalls launched after it was discovered that floor mats were trapping accelerator pedals.

Toyota's mishandling of the initial problem and other reports of sudden unintended acceleration led to a US congressional probe, about R450-million in fines and public apologies from its chief.

Early in December 2012 the company agreed to pay a record R147-million fine for failing to notify US authorities promptly accelerators could also be trapped under the mats of 2010 Lexus models.

Toyota has worked hard to regain its reputation for safety while fighting off the effects of the world economic crisis, a strong yen and the devastating 2011 quake-tsunami disasters. The settlement helps Toyota avoid a lengthy and risky court battle with angry owners who also argued that Toyota's technology - not the mats - were behind the instances of sudden, unintended acceleration.

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Read more on:    toyota  |  class action  |  fines

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