Toyota faces Congress scrutiny

Toyota is facing scrutiny from Congress over its biggest ever safety recall as investors and consumers weighed the impact of …

Toyota is facing scrutiny from Congress over its biggest ever safety recall as investors and consumers weighed the impact of an unprecedented halt in US production by the top automaker.

House Energy and Commerce Committee chairman Henry Waxman said he would hold a hearing next month to consider "how quickly and effectively" the car maker responded to complaints about unintended and dangerous acceleration.

"Like many consumers, I am concerned by the seriousness and scope of Toyota's recent recall announcements," Mr Waxman said in a statement.

The unusual action by the US government comes just hours after the Toyota recall for accelerator problems was widened to include China and Europe.

Toyota this week suspended North American sales and production of eight models including its best-selling Camry after pressure from regulators.

Japan's largest company, studied for its devotion to quality, Toyota's recalls on the problems including sticking pedals and slipping floormats could amount to about 8 million vehicles - more than the number of cars and trucks it sold worldwide in 2009.

In Tokyo, some worried about the knock-on effects to Japan's image and economy.

Analysts say the financial impact will depend on how long the safety problems shut production and whether Toyota's famously loyal customers begin to abandon the brand.

Shares of Toyota have dropped 17.6 per cent since January 21st, when it announced it was broadening its recalls by a further 2.3 million vehicles. The stock ended down 2 per cent in Tokyo today.

Industry analysts and executives estimate that it will cost some $250 million in warranty costs alone to address the smaller of the two recalls underway in the United States.

The automaker also faces the fallout from the larger recall that began last year and was broadened this week for vehicles at risk of having floormats that can become jammed under accelerator pedals.

Then there are the still unknown costs for lost production, financial support to dealers and sales incentives the company has told its retailers it is considering in a bid to keep customers being wooed by rivals.

Toyota has not released an estimate for the number of incidents of unintended acceleration. Consumer advocates say there are hundreds of such cases in Toyota vehicles.

Meanwhile, Toyota said it was racing to fix one of the recurring problems with sticky accelerator pedals that has forced it to shut down sales and production of most vehicles in the United States.