Toyota suffers fresh setback with Lexus engine fault

Toyota's latest issue may be relatively minor - but it's still a big blow to its recovery.

Last Updated: 06 Nov 2012

Just when it seemed Toyota was getting back on track after its annus horribilis, the carmaker finds itself in the headlines for all the wrong reasons once again: this time it's had to issue a warning about a potential engine fault in 270,000 of its cars, including its upmarket Lexus brand. Now it's true that this sounds like a less serious problem than some of its recent safety issues - the fault hasn't even led to a single accident - and it may just be erring on the side of caution. But after keeping its nose clean for a few months, this kind of story does rather put its brand rebuilding back to square one...

It's been a rotten year for Toyota, which has already had to recall more than 10m cars over safety concerns (at least some of which were probably justified). But recent headlines have been more positive: it emerged recently that the Japanese car-maker's June sales were up 26.7% on the same month last year, while this week it started production of the Auris, the first European-made petrol-electric hybrid, in Derbyshire. It's also been running lots of reassuring ads about how well made its cars are, as it tries to repair the damage done to its brand over the last 12 months.

So this latest issue is undoubtedly a setback - even though it sounds less serious than some of the previous problems. Apparently Toyota has realised that the engines of these cars might potentially stall while being driven, due to some problem with the valve spring. Not that we have any idea what a valve spring is, but we imagine that's not exactly ideal. On the other hand, it hasn't actually led to any accidents yet, as far as Toyota know (although we wouldn't be surprised if a few ambulance-chasing lawyers jumped out of the woodwork to report them now). And assuming it can put the problem right fairly quickly, there's normally no reason why investors would need to take fright.

On the other hand, the normal rules don't apply to Toyota: when you've been under a safety cloud for months, things like this just add further grist to the mill - and further discourage people from buying your cars. So it's possible that the damage caused by this latest potential recall could be disproportionate to the severity of the problem.

In today's bulletin:

Sky hikes prices - as BT offers its sports channels on the cheap
City fund managers hammered by new EU bonus rules
Toyota suffers fresh setback with Lexus engine fault
Editor's blog: Time for a woman to run the CBI?
Fatalities at work hit a record low

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