Toyota "knowingly hid a dangerous defect" that caused its vehicles to accelerate unexpectedly, the US said, for the first time accusing the world's largest carmaker of breaking the law.
Transportation secretary Ray LaHood proposed a record civil penalty of $16.4 million, the most the government can impose. The fine recommended yesterday escalates the confrontation between Toyota and Mr LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.
The fine was announced the week after Toyota reported US sales rose 41 per cent in
March, signalling the company may be recovering from global recalls of more than 8 million vehicles.
Toyota waited at least four months before telling US regulators that gas pedals might stick, Mr LaHood said in a statement yesterday. Companies have five business days to report safety defects, the Transportation Department said.
The department's action showed "safety matters and they're going to be tough as nails," Joan Claybrook, a former head of the National Highway Traffic Safety Administration, said in an interview. "That's very appropriate. They caught Toyota red- handed."
The Toyota City, Japan-based carmaker fell 1 per cent to close at 3,775 yen in Tokyo Stock Exchange trading today. The shares have declined 2.7 per cent this year.
"We now have proof that Toyota failed to live up to its legal obligations," Mr LaHood said in the statement. "Worse yet, they knowingly hid a dangerous defect for months from US officials and did not take action to protect millions of drivers and their families."
Toyota received a letter from NHTSA yesterday asking for the fine, Mieko Iwasaki, a Tokyo-based spokeswoman for the carmaker, said by phone today. "We are considering how to respond to it," Ms Iwasaki said. "Toyota is working toward making safe, reliable and high- quality cars to satisfy our customers and responding sincerely to customers' comments."
Mr LaHood has increasingly faulted Toyota's response since January 28th, when he said he had "no criticism" of the company and Toyota "did what they're supposed to do."
Toyota in January recalled about 2.3 million US cars and trucks for sticky accelerator
pedals.
The penalty could "very possibly" be the first of multiple fines, said Claybrook, former president of Public Citizen, a Washington-based consumer advocacy group.
NHTSA cited documents obtained from Toyota in saying the company knew about the pedal defect since at least September 29th, the day it told distributors in 31 European countries and Canada to make repairs to resolve sticky-pedal complaints.
"NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system," said Alan Baum, an auto industry analyst at Baum and Associates in West Bloomfield, Michigan. He said Toyota probably won't contest the fine, "since they've essentially said they screwed up."
At a February congressional hearing, Toyota's US sales chief Jim Lentz told lawmakers "we failed to promptly analyse and respond to information emerging from Europe and in the United States" about the sticky pedals.
Toyota has two weeks to accept or contest the proposed fine, Olivia Alair, a Transportation Department spokeswoman, said in an e-mail. If Toyota contests the penalty and a settlement isn't reached, "it would go to court", she said.
Toyota is facing at least 177 consumer and shareholder lawsuits seeking class-action status and at least 56 suits claiming personal injuries or deaths caused by sudden acceleration incidents, according to data compiled by Bloomberg.
Bloomberg