Toyota: Prius Brakes Have Design Problems

TOKYO (Associated Press) - Toyota admitted design problems with the brakes in its prized Prius, adding to the catalog of woes for the world's No. 1 automaker still reeling from a massive U.S. recall involving faulty gas pedals.

Toyota Motor Corp. spokeswoman Ririko Takeuchi said Thursday that Toyota discovered there were design problems with the antilock brake system and corrected them for Prius models sold since late January, including those being shipped overseas.

But the company said it was still investigating how to inform people who had bought the gas-electric hybrid cars. Nothing was decided on that front for Prius cars sold overseas, according to Toyota.

Complaints about braking problems in the third-generation Prius have been reported in both the U.S. and Japan, combining to some 180, and come amid a global recall of nearly 4.5 million other top-selling vehicles for faulty gas pedals.

"We are investigating whether there are defects in the Prius," Toyota executive Hiroyuki Yokoyama told reporters at Toyota's Tokyo.

The company gave few details of the brake flaw. A major Toyota dealership in Tokyo said the automaker had informed dealers that Prius brakes can sometimes fail to work for less than a second but it had not told owners.

"It is disappointing because the Prius was receiving such rave reviews," said Hiroyuki Naito, a manager at the dealership. The latest model Prius hit showrooms last May.

The problem with the Prius -- the best-selling hybrid in the world and Toyota's flagship model -- is a big embarrassment for the automaker in its home turf Japan and another blow in the U.S., its biggest market.

In recent weeks, the automaker had answered questions about its overseas recalls for gas pedals with assurances that problems didn't extend to Japanese vehicles, implying that it was doing a better job with quality control in Japan.

The transport minister is ordering an investigation and said a recall for the Prius should be considered. U.S. authorities are also investigating.

Earlier in Washington, U.S. Transportation Secretary Ray LaHood startled the public with a comment, which he later retracted, that Americans should park their recalled Toyotas unless driving to dealers for accelerator repairs.

The popular gas-electric Prius was not part of the most recent recall over sticking gas pedals in eight top-selling models including the Camry that spanned the U.S., Europe and China.

Toyota senior managing director Takahiro Ijichi defended the automaker's quality standards.

"We have not sacrificed the quality for the sake of saving costs," he said. "Quality is our lifeline. We want our customers to feel safe and regain their trust as soon as possible."

Toyota for the first time gave an estimate of the costs of the U.S. recall at up to $2 billion with $1.1 billion for the costs for the repairs and $770 million to $880 million in lost sales.

The Prius, the world's best-selling hybrid, has been extremely popular in Japan because of government incentives that made hybrids tax-free. More than 170,000 the new remodeled Prius cars were sold in Japan and about 103,000 have been sold in the U.S. since May.

Despite snowballing problems with quality, Toyota said Thursday it returned to profit in the October-December quarter because of healthy sales of its green models including the Prius, and raised its forecast for the fiscal year through March.

Net profit for October-December was about $1.7 billion. It forecast a $880 million annual profit compared with its previous forecast for a $2.2 billion loss.

Toyota also raised its full year sales outlook to 7.18 million units from 7.03 million. The revised forecast remains lower than the 7.57 million vehicles it sold last fiscal year. And it is unclear how well Toyota sales and profits will hold up in coming months.