Toyota to pay massive fine over pedal defect

Toyota has agreed to pay a record $16.4m (€12.17) fine for failing to properly notify federal authorities about a dangerous pedal defect, the US government said today.

The fine is the largest-ever penalty paid by a car maker to the US government, and is connected to a January recall of 2.3 million vehicles with sticking accelerator pedals.

US Transportation Secretary Ray LaHood said that by failing to report safety problems, Toyota put consumers at risk. The government says Toyota knew about the problem in late September and failed to report the defect within five business days, as required by law.

Toyota said in a statement that it agreed to the penalty “to avoid a protracted dispute and possible litigation”, allowing it to move forward.

The company denied the government’s allegation that it violated the law, saying it “did not try to hide a defect to avoid dealing with a safety problem”.

When it announced the recall in January, Toyota said it was aimed at addressing sticking pedals on popular vehicles such as the Camry and Corolla.

The company has recalled more than eight million vehicles worldwide because of acceleration problems in multiple models and braking issues in the Prius hybrid.

The fine was based upon timelines provided by Toyota that showed it had known about the sticky pedal defect at least since September 29, 2009, when it issued repair procedures to distributors in 31 European countries to address complaints of sticking pedals, sudden increases in engine RPM and unexpected vehicle acceleration.

The documents also indicated Toyota knew that owners in the US had experienced the same problems.

The Japanese car maker has been weighing up its options since the fine was announced in early April, but analysts had expected it to pay the penalty.

“When you look at the toll it’s taken on Toyota’s reputation, when you look at the number of vehicles involved, when you look at the hardship it’s placed on Toyota’s customer base, it’s only right for Toyota to take this fine,” said Dennis Virag, president of Automotive Consulting Group.

Transportation officials have not ruled out additional fines. The department is reviewing whether Toyota delayed for six weeks the late January recall of the 2009-10 Venza in the US to address floor mats that could entrap the accelerator pedal after making a similar recall in Canada.

Toyota recalled the Venza in Canada in December and reported to the US government on December 16 that the floor mats could move forward and interfere with the pedal.

Toyota told US authorities at the time that the floor mats in question were not imported into the US but the Venza was added to the floor mat recall in late January.

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