• Bloomberg


Toyota Motor Corp.’s Akio Toyoda, beset by recalls since taking over as president in 2009, is now finding more flaws in one of his most high-profile models and adding to a growing fleet of cars that need fixing.

Toyota said Wednesday that it is recalling about 1.9 million Prius hybrids worldwide, or more than half of those sold since the model’s debut 17 years ago. The company is asking its dealers to upgrade the software, which could cause the cars to lose power or shut down and stop.

While the grandson of Toyota’s founder has steered Toyota back to prosperity — the company is forecasting record profit this fiscal year — weeding out defects is among the targets that still elude him.

To focus on quality, Toyoda is holding back on building car plants until at least 2015 to avoid the type of overexpansion that he blamed for spurring more than 10 million recalls in 2009 and 2010.

“It’s too early to tell whether this raises serious question marks over Akio Toyoda’s revamp of Toyota, or whether the bad, old ways are still there,” said Ashvin Chotai, managing director of Intelligence Automotive Asia. “This takes the spotlight away from a lot of the good things that have been going on at the company.”

The flaw within the Prius hybrid system software may cause some parts to overheat in driving situations such as accelerating from a stop, Toyota said. This can lead to the car entering a “fail-safe mode,” where it can still be driven at reduced power, or in limited cases, shut down the hybrid system and stop the vehicle.

Toyota hasn’t received any reports of accidents or injuries related to the software problem, according to the statement.

Toyota has been the industry’s hybrid leader, having built three generations of the main Prius model and adding derivatives such as the Alpha wagon, sold as the v in the U.S. market, since 2011. The recall announced Wednesday involves all of the main Prius models built in the third generation, spokesman Brian Lyons said.

As of last year, worldwide deliveries of the Prius line of vehicles exceeded 3.6 million units since Toyota first released the hybrid in 1997.

Toyota called back more vehicles than any automaker in the U.S. in each of the last two years, according to the National Highway Traffic Safety Administration. The Prius recall involves almost 1 million vehicles in Japan and about 700,000 cars in the U.S. market, Lyons said.

Investors weren’t immediately spooked by the recall, announced an hour before the market close in Japan, as the stock ended Wednesday at ¥6,020 in Tokyo trading, up 0.4 percent.

“My impression is Toyota is recalling more often, even with very minor flaws” with its vehicles, said Yuuki Sakurai, the Tokyo-based president of Fukoku Capital Management Inc. “Toyota learned its lesson from the big recalls in 2009 and 2010.”

Aside from the Prius, Toyota also said Wednesday that it will recall about 260,000 other vehicles in the U.S. That campaign involves a separate issue with the 2012 and 2013 model years of the Toyota Tacoma pickup and Lexus RX 350 sport utility vehicle, and the 2012 Toyota RAV4 SUV.

A software issue with those models can cause their stability, anti-lock braking and traction controls to intermittently turn off, though the standard braking operation in those vehicles would remain fully functional, according to a statement posted on Toyota’s U.S. website.

The recalls follow Toyota forecasting this month that profit for the year ending in March will surge to a record ¥1.9 trillion, driven by the weaker yen, which boosts the value of cars exported out of Japan.

It has set a target of selling an unprecedented 10.32 million vehicles in 2014 after leading General Motors and Volkswagen in global deliveries for a second straight year in 2013.

Worldwide sales for Toyota, including by subsidiaries Hino Motors Ltd. and Daihatsu Motor Co., rose 2.4 percent to 9.98 million units last year. Volkswagen and its MAN SE and Scania AB (SCVB) heavy-truck units followed with 9.73 million sales, VW said last month. GM was third in the industry with 9.71 million.

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