Toyota hurt but not beaten by mat woes

       Toyota's biggest ever US recall is an image blight, dealing a blow right when the Japanese automaker had been planning a North American marketing blitz to turn around its money-losing business.
       Yet the news could have been worse for Toyota Motor Corp.
       The problem can be fixed with relative ease by exchanging floor mats, when some recalls involve taking apart cars.
       Analysts said yesterday the flaw was unlikely to exact a great toll on Toyota's already-suffering bottom line.
       "It's making big headlines because of the big numbers, but in terms of the company's profits, it is not likely to have a big impact," said Mamoru Katou, auto analyst with Tokai Tokyo Research.
       As many as 3.8 million Toyota vehicles in the United States may need to replace floor mats that are suspected of causing accelerators to get stuck, leading to crashes.
       The recall would involve popular models such as the Toyota Camry, the top-selling passenger car in America,and the Prius, the best-selling gas-electric hybrid, although it doesn't include the third-generation Prius that went on sale earlier this year.
       Toyota has expanded globally, riding on its reputation for sterling quality,and became the world's biggest automaker in 2008, surpassing General Motors Co.
       But even Toyota officials have acknowledged that recalls have been surging in recent years, and more efforts are needed to ensure quality.
       Toyota spokesman Yuta Kaga in Tokyo said it was still unclear whether the company will issue a formal recall over the floor mats."For now, Toyota is telling owners to take out the mats, and not replace them while the company investigates causes."
       He denied a Kyodo report that said Toyota was scrambling to check if the same problem was affecting vehicles sold in Japan.
       The company did not yet have an assessment for the costs, including legal fees or liability costs.
       Ryoichi Saito, auto analyst for Mizuho Investors Securities in Tokyo, said changing a floor mat was likely not as expensive as dealing with a defective transmission or engine.
       "Recalls are never good for a company's image," he said."But I don't foresee major damage to Toyota's earnings."
       The floor mat problem is just the latest in Toyota's troubles.
       The world's biggest automaker by global vehicle sales, Toyota was seriously battered by the credit crunch and auto slump that struck last year, sinking to its worst ever yearly loss of 437 billion yen ($4.9 billion) for the fiscal year ended March 31.
       Toyota is forecasting a 450 billion yen loss for the fiscal year through March 2010, although hopes surfaced have lately that the worst may be over, with sales recovering enough to allow Toyota to project a narrower loss.
       The automaker has been preparing an aggressive marketing campaign in North America for the coming months,although Kaga declined to confirm a reported $1 billion in spending.
       Toyota announced yesterday it was rehiring 1,600 contract workers at its Japanese plants, whose contracts had not been renewed during the slowdown.Toyota said overseas and domestic sales were recovering, boosted by ecological and tax incentives around the world.
       Earlier this month, the automaker said it was adding 800 such workers, because of booming Prius sales, but said that was now being doubled.
       The National Highway Traffic Safety Administration has said it had received reports of 102 incidents in which the accelerator may have become stuck on the Toyota vehicles involved.
       The inquiry was prompted by a crash in August in California of a Lexus barreling out of control, killing California highway patrol officer Mark Saylor,45, and three family members.
       The recall will affect 2007-2010 model year Toyota Camry,2005-2010 Toyota Avalon, 2004-2009 Toyota Prius,2005-2010 Tacoma,2007-2010 Toyota Tundra,2007-2010 Lexus ES350 and 2006-2010 Lexus IS250 and IS350.