Toyota suspends sales of 8 models in recall

Toyota Motor Corp said it will suspend sales in North America of eight models involved in recall.

Toyota Motor Corp said it will suspend sales in North America of eight models involved in recall,a move that could throw the timing of its earnings recovery into doubt and one that pushed its shares 2 per cent lower.

Toyota also said it would halt production of the models at plants in the United States and Canada in the first week of February.

Last week,the world8217;s biggest automaker announced it would recall 2.3 million vehicles in the United States to fix potentially faulty accelerator pedals,its second massive recall in four months in the US

8220;The recall itself won8217;t be a big problem for Toyota8217;s earnings,but suspending production and sales could have a big impact depending on how long it lasts,8221; said Koji Endo,an auto analyst at Advanced Research Japan.

Toyota has forecast a 350 billion yen operating loss for the year to March 8212; a projection widely regarded as conservative.

It was expected to post a operating loss of around 47 billion yen in the year to March 2010,before rebounding to a 599 billion yen profit in 2011,according to 19 analysts polled by Thomson Reuters I/B/E/S.

8220;There is a chance that Toyota could swing to profit this business year,but this sales and production suspension may have a certain impact,8221; Endo said.

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The sales suspension and recall includes Toyota8217;s top-selling vehicle in North America,the Camry,for model years since 2007.

Also included are the 2009-2010 model year RAV4,Corolla and Matrix,the 2008-2010 model year Sequoia,the 2007-2010 model year Tundra,the 2005-2010 model year Avalon and the 2010 model year Highlander.

Annual combined sales of these models are 1 million cars in North America,more than half of Toyota8217;s annual sales there last year,according to Advanced Research8217;s Endo.

8220;In this highly competitive market,no automaker,not even Toyota,can afford to stop selling its cars and trucks for long,but perhaps Toyota is banking on the idea that customers will appreciate the priority of their safety in this decision,8221; said Jessica Caldwell,senior analyst at Edmunds.com.

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Bob Carter,Toyota US group vice president,said the world8217;s No.1 automaker is taking the actions to ensure safety and restore confidence in Toyota among consumers.

8220;This action is necessary until a remedy is finalized,8221; Carter said in a statement. 8220;We8217;re making every effort to address this situation for our customers as quickly as possible.8221;

Shares of Toyota fell 1.9 per cent,compared with a 0.3 per cent rise in Tokyo8217;s Nikkei stock average.

The plants where the models are made are located in Indiana,Texas,Kentucky,and in Ontario.