TOKYO — For all the turmoil over Toyota’s wave of recalls, the company, the world’s largest automaker, may face a bigger problem: the surging yen.

With the yen at 15-year highs against the dollar, a 9-year peak versus the euro and still near recent heights against the won, Toyota is finding that its cars have become too expensive to compete in the increasingly cutthroat global auto market, reported The New York Times. That has created inroads around the world for its non-Japanese rivals, like Volkswagen of Germany, Hyundai of South Korea and the Detroit automakers, all of which are benefiting from relatively weaker currencies.

Hyundai is rapidly increasing its share in major markets, including the United States and China, using record profit to offer aggressive sales incentives that Toyota is struggling to match.

Volkswagen continues to dominate in Europe and across much of the Asia-Pacific region. Its chief executive, Martin Winterkorn, has said the automaker aims to be the world’s largest in sales by 2018, up from its current third place.

Analysts say the yen, which started soaring as a refuge currency in late 2008 in response to the global financial crisis, has highlighted a flaw in Toyota’s global production setup. The problem, they say, is that the company depends too heavily on factories and suppliers in its high-cost homeland.

Although Toyota is taking steps to improve the ratio, about half of its cars are still assembled in Japan, many of them then shipped overseas.

“Before the yen’s surge, Toyota got by with exporting lots of cars, even though it was aware that posed a big currency risk,” said Takashi Akiyama, vice president at SC-Abeam Automotive Consulting, based in Tokyo.

“They held out for as long as they could, but now they’re seeing the consequences of stalling,” Mr. Akiyama said.

Other big Japanese exporters, like Honda, Nissan, Sony and Canon, feel the yen’s burden, too. The country’s export growth slowed for the fifth consecutive month in July, weighed down by the strong yen. But because they have moved more of their production overseas in recent years, those companies suffer much less from currency imbalances.

The difference is laid bare in a startling statistic: For every yen that the Japanese currency gains in value against its assumed dollar rate of ¥90, Toyota says, it loses ¥30 billion, or $357 million, in operating profit. If the exchange rate stays at the current ¥84 to a dollar, Toyota’s operating profit for its financial year ending next March, which the company forecasts will reach ¥330 billion, could fall by half.

By that same measure, Nissan says it loses only half as much for each yen’s gain against the dollar — about ¥15 billion yen. Sony loses but ¥2 billion.

LOS ANGELES – Toyota Division sales may have fallen 34 percent in August — and are now down 1 percent for the year to date — but General Manager Bob Carter isn’t panicking.

Toyota was the No. 1 beneficiary of cash-for-clunkers trade-ins last August, representing more than 50 percent of sales. That gave Toyota a tough mark to equal this year, Automotive News reported.

Despite that target, Toyota remained the No. 1 brand in retail sales this August, and the Camry was the top-selling passenger car. Fleet sales were just 6 percent of volume, compared with 9 percent for the year, which crimped overall numbers.

“The numbers don’t look very pretty, but August was a fair month for Toyota,” Carter said in a conference call. He noted that August vs. July 2010 sales showed a slight decline.

Toyota conquest rates remain at pre-January recall crisis levels, with 57 percent of trade-ins coming from competitive makes, Carter said.

Customer response to the Toyota Auto Care promotion, which offers two years of free maintenance, was so strong that Toyota will continue it through September. The promotion was set to expire after Labor Day.

Toyota’s incentive spending was about $2,200 per new vehicle sold, according to the Power Information Network. While high for Toyota, it’s still “a function of the economy” and “at the lowest levels of the industry,” Carter said.

Carter sees both caution and optimism in consumer confidence. Despite recent disappointing data on jobs and housing, the recovery remains on track, albeit at a decelerated pace, he said. Toyota is predicting 2010 sales of between 11.2 million and 11.5 million vehicles.

Perhaps because consumers aren’t ready to plunk down money on a new car, sales of Toyota certified pre-owned vehicles showed their best August and the brand’s fifth consecutive record month.

WASHINGTON – Toyota Motor Corp. and General Motors Co. today announced recalls of 1.3 million vehicles from the 2005-2008 model years following complaints of engine stalling, Automotive News reported.

Toyota issued a recall of 1.1 million Corolla and Corolla Matrix vehicles after more than 1,000 complaints.

GM will recall 200,000 Pontiac Vibes, including 162,000 in the United States, after a “handful” of complaints, said GM spokesman Alan Adler.

The Vibe, a sister vehicle for the Matrix, was produced as part of the New United Motor Manufacturing Inc. joint venture between the two companies in California that is now defunct.

Toyota said it was addressing some engine control modules — the computer that controls the engine — that may have been improperly made.

Cracks may develop at solder points or on the electronic component used to protect circuits against excessive voltage — in some cases stopping the engine while the vehicle is being driven, the statement said.

The announcement today raises Toyota recalls since November 2009 to about 12.3 million vehicles worldwide and 10.5 million in the United States, most for sudden acceleration, Toyota spokesman Brian Lyons said.

The supplier of the modules at issue in today’s recall was Delphi Corp., a Delphi spokesman said.

“The ECM’s supplied to Toyota were designed and validated in accordance with specifications provided to us by Toyota,” said Delphi spokesman Lindsey Williams. “We continue to work collaboratively with Toyota and support them in this recall campaign.”

All the affected Toyota vehicles were sold in North America.

“Our goal is to help ensure that Toyota drivers are completely confident in the safety and reliability of their vehicles,” Steve St. Angelo, Toyota’s chief quality officer for North America, said in a prepared statement.

Earlier this week, the National Highway Traffic Safety Administration said it was upgrading its investigation of the Corollas.

Toyota’s popular Corolla model also faces other regulatory concerns. Since February, NHTSA has been investigating dozens of complaints of steering problems with the Corollas from model years 2009 and 2010.

SAN ANTONIO – Years before Toyota Motor Corp.’s quality problems raised doubts about its centralized management style, the automaker already was planning to shift more authority to its U.S. operations to allow them to react faster to changing market conditions, reported The Detroit News.

Now Toyota is pursuing that strategy with renewed vigor, after reviewing the missteps that led to record recalls in its most lucrative market, a top executive said. Since June, Toyota has promoted several U.S. and Canadian executives to build the ranks of future managers for North America.

“We’re trying to change the structure,” said Atsushi Niimi, executive vice president of Toyota in charge of North America and global manufacturing.

Toyota drafted a plan in 2002 titled “Project Self-Reliance,” which was adopted two years later. But it didn’t advance far, and when the biggest crisis in Toyota’s 53-year history in the United States erupted last year, decision-making was still concentrated at its headquarters deep in the Japanese heartland.

Toyota is moving fast now, appointing four U.S. and Canadian managers to run assembly plants in the past two months. But it also plans to send Japanese executives on North American stints to support the regional operations.

“To promote self-reliance, we have to increase the local capabilities,” Niimi said here, in a rare interview with a U.S. newspaper. “During the initial transition period, we’ll dispatch Japanese executives to local operations who can make decisions right there.”

Those executives also are expected to strengthen the analytic capabilities in the region and transfer expertise across a wide range of areas, from parts procurement to production.

Compared with British giant BP’s move to install its first American chief executive after a record oil spill, Toyota’s actions seem incremental. But this is a big step for the company that Nissan Motor Co. CEO Carlos Ghosn once described as the most Japanese of the Japanese carmakers.

Some analysts who have followed Toyota for a long time aren’t convinced that things will change, even now. “They want to do these things, but they don’t have a culture that welcomes that level of participation,” said Maryann Keller of Maryann Keller & Associates in Stamford, Conn.

In 2007, sales chief Jim Press became the first non-Japanese member of Toyota’s board. But his presence had little impact, and Press left the same year. People familiar with the situation say some of Toyota’s top executives opposed plans to shift more authority to regional operations.

Now, however, Toyota’s management style has been implicated in the poor handling of the quality problems and recalls. Not only has Toyota’s reputation been tarnished, it faces lawsuits and federal investigations in the United States, where it traditionally generates more than half of its profits.

Former U.S. Transportation Secretary Rodney Slater, retained by Toyota to form a panel of experts to review what went wrong, said in April that the panel was looking into management issues at the company, notably “the flow of communications.”

Toyota is confident that it has identified the causes of its problems. For one thing, Niimi said, it grew too fast. Toyota’s sales expanded 50 percent between 2002 and 2007, when they peaked above 9 million. The organization couldn’t keep pace.

Toyota is adamant on two points: It did not cover up defects, and it has seen no evidence of mysterious malfunctions in the vehicles’ electronic systems. Two weeks ago, the U.S. Transportation Department said its preliminary review found no electronic problems in the Toyota vehicles that it examined that could cause unintended acceleration.

Still, Toyota executives don’t dispute that things did go wrong, as shown by a rash of defects ranging from sticking pedals and rusting frames to cracking parts in steering systems.

As reports of problems piled up in the United States, poor communications stymied the response. The magnitude of the problems wasn’t always clear to managers in Japan, Niimi said.

The situation exposed shortcomings in Toyota’s organization, which he described as a series of concentric circles with the Toyota City headquarters at the center. All regions report to the center and relay information to other regions through the headquarters.

More responsibility will be delegated to all regional operations, not just North America.

Toyota is still working out the details, Niimi said. If, for instance, U.S. managers want to recall a vehicle but similar models are sold elsewhere in the world, “can the U.S. operation alone make the decision? This is one of the challenges,” he said.

U.S. lawmakers and industry experts say Toyota might have limited the damage had the company had a U.S.-based executive who could sign off on recalls.

But even within the United States, the sales, manufacturing and regulatory operations are in different states, and they don’t always seem aligned.

Memos written by managers in Toyota’s Washington office suggest that cost was a primary concern when negotiating safety recalls with regulators.

And in 2009, Toyota was telling dealers to ensure that vehicles were fitted with the right floor mats. But the urgency of the message wasn’t getting through — even though Toyota had a floor mat-related recall in 2007.

An investigation into the crash last August of a Lexus ES 350 sedan near San Diego found that a wrong-sized mat had trapped the gas pedal. The car had been loaned to California Highway Patrol Officer Mark Saylor by a dealer.

Four people died in the wreck, which focused national and government attention on complaints of runaway Toyotas.

Toyota created internal and outside quality panels and appointed regional managers who can appeal directly to President Akio Toyoda if they see a quality issue requiring urgent action.

Steve St. Angelo, a former General Motors executive, is Toyota’s chief quality officer for North America and one of the company’s top manufacturing executives in the region.

“On the outside,” St. Angelo said, “it may appear like we’re adding layers of management, but we’re able to make decisions quicker because all the right players are in the room.”

The North American managers’ influence is growing. “We are much, much more involved in running the business today,” he said, “than we’ve ever been.”

Five months into an investigation of safety issues involving Toyota Motor Corp. vehicles, U.S. safety officials have yet to identify any new defects beyond those reported by the carmaker itself, reported The Wall Street Journal.

And in more than half of the crashes blamed on sudden acceleration analyzed by the government, data from the vehicles’ “black boxes” show the driver was not stepping on the brake at the time of the accident—indicating that driver error may have been at fault.

Those were the findings that U.S. Transportation Department officials disclosed Tuesday to members of Congress, offering the first significant details of the government’s ongoing investigation into Toyota’s recall of more than 8.5 million vehicles globally since last fall.

Officials stressed that their investigation continues and may take months to complete. But the data, at least for now, support Toyota’s assertion that electronic defects in its cars aren’t behind the incidents.

Experts at the National Highway Traffic Safety Administration examined 58 vehicles involved in sudden-acceleration reports and found data in 35 of them showed the brakes weren’t applied at the time of the crash. Data from nine other vehicles showed the brakes were used only in the last moment before impact.

The report doesn’t specify driver error as a cause of unintended acceleration, although people familiar with the investigation have said the findings point to pedal misapplication—mistakenly hitting the gas instead of the brakes—as a likely cause.

The release of the preliminary findings comes after calls from Congress to make public the results of NHTSA’s investigation into complaints about sudden acceleration in Toyotas. The Wall Street Journal reported in July that NHTSA had found evidence of driver error in most of the Toyotas it examined in its probe.

Toyota has identified floor mats that can entrap a car’s gas pedal as one cause of sudden acceleration. Another problem Toyota identified is a gas pedal mechanism that sometimes can be slow to return to its non-depressed position. Toyota has recalled more than eight million vehicles world-wide to correct those issues.

In five of the 58 vehicles NHTSA examined, the data recorders didn’t record the conditions in the car at the time of the crash. Black boxes from five additional vehicles showed the brakes were applied early in the incident or in the middle of the event. In one case both the brake and accelerator pedals were depressed. Investigators found one case of sustained braking and concluded the floor mat likely trapped the gas pedal.

NHTSA is still examining the data in one case, and in another it found that the information recorded was unrelated to an incident of sudden acceleration.

“The limited research completed so far has not led to identification of safety defects other than sticking gas pedals or pedal entrapment,” the report said.

Toyota said its own investigation has found no evidence that glitches in the electronic components of gas pedals could cause sudden acceleration, as some auto safety advocates have suggested.

Rep. Bart Stupak (D., Mich.), chairman of the Energy and Commerce Committee’s oversight panel, which held hearings on the Toyota recalls this year, said the report resolved few questions about the sources of the Toyota crashes.

SAN ANTONIO, Texas – Toyota Motor Corp. managers are renowned for collecting reams of data to predict market trends, but the Japanese automaker’s truck plant stands here as a symbol of one time when Toyota got it wrong, The Detroit News reported.

Its full-size Tundra pickup never sold as well as Toyota expected four years ago, when it opened the assembly plant dedicated solely to Tundra production.

But after the devastating industry downturn of 2008 and 2009, Toyota decided to build a smaller truck here as well, its Tacoma, and the company marked the start of its production here Friday.

Proclaiming “It’s Tacoma Day in Texas,” Gov. Rick Perry joined local officials, senior Toyota executives and plant workers at the factory for a brief but lively midmorning celebration.

Toyota has hired 1,000 new workers and invested $100 million to produce Tacomas on the same line as Tundras, bringing the total investment in the plant to $1.4 billion.

The factory now employs 2,800 “team members,” as the workers are called, including the original hires who were retained even when Toyota halted production in San Antonio for three months in late 2008.

Toyota stopped making the Tacoma and other vehicles in Fremont, Calif., after General Motors, its partner in New United Motor Manufacturing Inc., quit the venture as part of its bankruptcy in 2009.

Toyota said last August that it would transfer Tacoma production to the Texas plant, which was running well below its production capacity. Output of Tacomas in Texas began a month ago.

By making the Tundra and Tacoma on the same line, Toyota will be able to respond better and faster to the market’s demands, said Jim Lentz, president of Toyota Motor Sales, the U.S. sales subsidiary based in Torrance, Calif.

When gas prices spiked in 2008, demand for thirsty full-size trucks plunged, while demand for midsize, more affordable trucks held up better, he said.

Toyota’s Tacoma starts at just over $16,000; the Tundra starts above $23,000 and the largest, most powerful versions cost more than $40,000.

But demand for full-size pickups is starting to rebound. GM and Ford Motor Co., the dominant players in this segment, are reporting strengthening demand for their big pickups.

“We’re seeing a slight increase in construction and in demand from municipalities and small businesses, and that’s helping to rebuild this segment,” said Rebecca Lindland, an analyst at IHS Automotive in Lexington, Mass.

Sales of Toyota’s Tundra are up 20 percent this year, while Tacoma sales are flat, Lentz said.

Referring to industrywide sales of full-size pickups, he said, “I don’t think they’ll be back to the 2 million mark, but maybe to 1.6 million, 1.8 million.”

For the year, Lentz predicted Toyota will sell about 205,000 pickups in the United States: 100,000 Tundras and 105,000 Tacomas.

Toyota also produces 50,000 Tacomas in a plant on the outskirts of Tijuana, Mexico.

TOKYO — Despite a strong yen and the lingering fallout from recalls, Toyota said it had returned to a profit in the April-to-June quarter because of strong sales in emerging markets and aggressive cost-cutting, reported The New York Times.

Toyota’s net quarterly profit of 190.4 billion yen, or $2.2 billion, was a sharp reversal from a loss of 77.8 billion yen in the period a year ago. The automaker continued to recover from a slump brought on by a global recession and a series of recalls over faulty pedals and inquiries into its safety record.

The company, based in Toyota City, Japan, raised its net profit outlook for the year ending in March 2011 to 340 billion yen, from a 310 billion yen forecast earlier this year, citing a recovery in sales and progress in cost-cutting efforts.

Toyota said it now expected to sell 7.38 million vehicles in the fiscal year, up from the 7.29 million forecast earlier.

But Takahiko Ijichi, senior managing director, said the strengthening yen could cloud the outlook. The yen has risen steadily in recent months, hitting an eight-month high against the dollar in trading Wednesday as concerns over the American economy caused investors to sell the dollar.

A stronger home currency hurts Japanese exporters by making their products more expensive overseas and eroding the yen value of their foreign currency earnings. Toyota said it had based its full-year forecast on exchange rates of 90 yen to the dollar; however, the dollar was selling for around 85 yen in late trading in Tokyo on Wednesday.

Ijichi also warned that a faltering economic recovery in major markets, including the United States, and the expiration of government incentives could also hurt earnings. In Japan, sales are expected to lose steam later this year when the government winds down subsidies for fuel-efficient cars.

Still, revenue at Toyota surged to 4.87 trillion yen in the quarter, an increase of 27 percent from the same period the previous year. The automaker sold 1.82 million vehicles in the quarter — 419,000 more than a year earlier.

Ijichi said that a companywide cost-cutting drive, including efforts to reduce waste in Toyota’s supply chains, had added 50 billion yen to profit.

Toyota said business was brisk in Asia and the Middle East, though Toyota still lagged rivals in China, the biggest market in the world.

The effects of the economic downturn and the pedal recalls were still evident in the United States, although aggressive incentives were helping to lure buyers back. Toyota said Tuesday that its sales in the United States had fallen 3.2 percent in July from the period a year earlier.

“Asia is growing at an incredible rate,” Ijichi said. “We expect this to continue for the time being.”

The outlook for the United States was more uncertain, he said, given mixed signals on the strength of the recovery there. “There are signs that the auto market remains resilient,” he said. Automakers are on track to sell about 12 million vehicles this year in the United States, up from 10.4 million in 2009.

In the business year that ended in March, Toyota earned 209 billion yen. In the previous year, it lost 437 billion yen, its first annual loss in decades.

In the year that ended in March 2008, Toyota’s net profit hit 1.7 trillion yen.

SANTA ANA, Calif. – Toyota Motor Corp. knew of at least six sudden acceleration incidents as early as 2003, including some that were verified by its own technicians and dealers, according to court documents filed Monday as part of sprawling litigation against the Japanese automaker, reported The Detroit News.

The incidents were reported to Toyota and culled from thousands of pages of internal documents that were included in filings made in U.S. District Court in Orange County.

Plaintiffs lawyers allege that the automaker did not respond appropriately to complaints in hundreds of lawsuits filed against Toyota in state and federal court after the automaker began recalling millions of vehicles.

Toyota has recalled more than 9 million vehicles worldwide, including more than 7 million in the United States, mostly to address the risk of unintended acceleration but also to correct other problems ranging from rusting truck frames to brake glitches in the Prius hybrid.

Toyota responded that it had identified two mechanical causes of unintended acceleration and had addressed the problem with “effective and durable solutions” in the recalls. “Toyota rejects claims that plaintiffs suffered economic damages because of the recent recalls,” the company said.

“Importantly, to date, plaintiffs have not cited a specific cause that would support their claim of a defect in Toyota’s electronic throttle control system,” it said in a statement. “No credible scientific theory or proof has been advanced to support this allegation. Toyota firmly believes that the system is completely safe and that reliable scientific evidence will demonstrate the safety of our vehicles in the investigations currently underway and, ultimately, to the court.”

Some plaintiffs allege that Toyota’s electronic throttle control system is defective.

According to the National Highway Traffic Safety Administration, by the time that Toyota issued major recalls to address the risk of unintended acceleration last fall, the automaker had received 2,000 complaints of unintended acceleration over a decade — more than other automakers.

The issue is extremely difficult because industry experts say most cases of reported unintended acceleration involve driver error. But Toyota has identified mechanical causes, including loose floormats that can entrap pedals.

It has replaced gas pedals and adjusted the floor space of some vehicles to keep pedals from getting entrapped by loose mats or other materials. It is installing a brake override system in all new and many older models.

One of the new filings seeks class-action status for vehicle owners claiming the value of their cars has diminished because of alleged defects, while the other claims damages for motorists injured or killed in accidents blamed on sudden acceleration.

Specific information about the incidents, however, was barred from public view to protect customers’ privacy, and the complaints did not list the dates of problems or the year or the model of each Toyota involved.

LOS ANGELES — For the first time since the January recall frenzy connected to allegations of runaway vehicles, Toyota says its conquest ratios have returned to historical levels, Automotive News reported.

Typically, about 45 percent of Toyota sales come from shoppers who had been driving a Toyota, Scion or Lexus vehicle, with 55 percent captured from competing brands, said Bob Carter, Toyota Division general manager. When complaints of unintended acceleration intensified in January, Toyota’s conquest ratio dipped below 50 percent, Carter said

In July, Toyota said, that trend reversed, with 57 percent of Toyota sales coming from rival brands.

“July was the first month where we went back to normal trade-in cycle,” Carter said. “Again we were the leader in retail sales, with retail sales up 17 percent from June. Camry once again is the top-selling car for the year.”

As a result of that gain in conquest sales, Carter expects Toyota’s overall share to grow 2 percentage points in July, to 16.1 percent.

Part of those gains might be from bargain hunters eyeing Toyota’s relatively high incentives, which will continue into August, Carter said.

Although Toyota’s incentive spending in July was down from second-quarter levels – an all-time high for Toyota – the automaker’s discounts are still $450 per unit higher than last year, according to edmunds.com.

Toyota’s U.S. sales are up 8 percent year-to-date, to 1.02 million units, in an overall market that has climbed 15 percent.

WASHINGTON – Toyota Motor Corp. announced it would recall 412,000 vehicles today for steering issues — in its 13 and 14th recall campaigns of 2010, The Detroit News reported.

The new recalls mean Toyota has recalled more than 5 million vehicles in 2010 in the United States — and the company has surpassed the 4.8 million vehicles it recalled in 2009.

The new recalls includes 373,000 2000-2004 Toyota Avalon models to address concerns the vehicle’s steering lock bar could break under certain conditions.

The company said it first received a report in Japan of possible problems in October 2007 — and another report in December 2008 in the United States. “Toyota believed that this was another isolated case,” the company told the National Highway Traffic Safety Administration.

Toyota also said it will recall 39,000 2003-2007 Lexus LX 470 vehicles to address a steering shaft issue.
The company first received a field report from Germany in October 2009, which said the issue had been seen on three vehicles — at least two with high mileage. Another report of the problem from Japan received in January suggested it may have been caused due to driving under harsh conditions.

Toyota has come under a torrent of criticism in the wake of its recall of more than 8.5 million vehicles worldwide for sudden acceleration issues. It paid a $16.4 million fine to the government for delaying a recall of 2.3 million vehicles by at least four months and is a subject of a federal criminal investigation over its handling of recalls.

The new Toyota recall is to address concerns that after a severe impact to the front wheels — like striking a deep pothole — that it could disengage the steering shaft. Toyota will install a newly designed snap ring and another component to prevent separation of the steering shaft.

“Toyota is continuing to work diligently to address safety issues wherever they arise and to strengthen our global quality assurance operations so that Toyota owners can be confident in the safety of their vehicles,” said Steve St. Angelo, Toyota chief quality officer for North America.

Toyota will replace the steering column bracket — a procedure that will take about two hours. Owners will get notified starting in late August.

Lexus owners will get notified in mid-August.