Shares of Japanese auto giant Toyota Motor Corp. (TYO.7203) slipped, Wednesday, despite news that an initial investigation by the US government has revealed that the electronic throttles on Toyota vehicles, long suspected for being defective and causing unintended acceleration, are sound.
The US Department of Transportation said, late Tuesday, that inspection of several event data recorders (EDRs) removed from certain Toyota vehicles, which reportedly accelerated suddenly, has revealed that electronic throttles were not the cause for the unintended acceleration that resulted in crashes, some even leading to death.
Addressing the Congress, Transportation Secretary Ray LaHood and his top auto safety deputy said the National Highway Traffic Safety Administration (NHTSA) inspected 58 EDRS and could not find any new cause for the unintended acceleration beyond what has already been established - mechanical defects in accelerator pedals that cause them to "stick" and loose floor mats that jam the pedals.
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The NHTSA said that out of 58 recorders studied, 35 showed that no brake was applied - indicating driver error. In other words, some Toyota vehicle owners, who claim that their vehicles surged out of control, could have accidentally rammed the accelerator when they meant to brake.
In 5 cases, the EDRs did not record any data at all.
Of the remaining 18, 14 suggested that brakes were applied partially before the crash; 1 suggested that the accelerator pedal was jammed; 1 suggested that the accelerator pedal and the brake were applied at the same time; 1 recorded information unrelated to an incident of sudden acceleration; while yet another contained, what the safety agency called "inconclusive data."
The safety agency said the initial investigation has revealed no new cause for the unintended acceleration. "At this early stage period in the investigation, engineers have not identified any new safety defects," Transportation Department spokeswoman Olivia Alair said.
However, "reviewing event data recorders is one small part" of the government's "effort to get to the bottom of unintended acceleration in Toyota vehicles," Alair said.
The NHTSA, as part of its investigation, has asked space agency experts National Aeronautics and Space Administration (NASA) to examine the software-driven throttles. The safety agency is also planning to ask an independent scientific panel to study the matter separately.
"NHTSA and NASA are continuing to study whether there are potential electronic or software defects in these vehicles," the safety regulators told the congressmen.
A comprehensive report is not expected until 2011.
The US Department of Transportation's statement corroborates an earlier claim made by Toyota that the electronic throttles in its vehicles are sound. Last month, Toyota had said that that its internal review of over some 4000 vehicles had found that the electronic throttles had no problem and in most cases, driver error was to be blamed.
Toyota had said its internal tests include bombarding vehicles with electromagnetic interference at more than twice the level that would occur in real-world conditions, line-by-line evaluation of system software and testing of vehicles in laboratories that replicate hurricane-level rain and excessive heat and cold. The results strongly suggest that the electronic throttle systems in Toyota vehicles are sound, the company had said.
While Toyota spokesman Mike Michels had blamed "pedal misapplication" as the cause in "virtually all" cases of unwanted speeding, the company had said that the sudden acceleration that led to crashes could also be because of loose floor mats that can jam the accelerator pedal, not allowing it to spring back as designed, or "sticking" acceleration pedals.
The company had said that as a precaution it will install brake-override software - a technology designed to stop a car if the brakes and accelerator are applied simultaneously - in all new vehicles by model year 2011.
However, the US regulators' findings failed to lift the automaker's shares because the findings do not exonerate the company from two known issues blamed for sudden acceleration in its vehicles: "sticky" accelerator pedals that don't return to idle and floor mats that can trap the accelerator pedals to the floor.
While IHS Automotive analyst Rebecca Lindland said Toyota can't gain anything "by pointing the finger at the consumer at this point," Gimme Credit analyst B. Craig Hutson said it's not surprising to find the NHTSA say that nothing's wrong with the electronic throttle system.
"We would not expect an investigation of the EDRs to find a problem with Toyota's electronics systems," Hutson said. "The EDRs are not designed to identify these types of problems. An electronics problem likely lurks in the millions of lines of software code found in a typical vehicle."
Agrees Andy Chou, chief scientist with Coverity, a company that tracks down defects in software programs. "It's very hard to rule out software as a cause. I don't think by looking at a little bit of data you can rule out a software defect," Chou said.
According to Sean Kane, president of Massachusetts-based Safety Research & Strategies Inc., a group that works with plaintiffs' attorneys on auto safety cases, the NHTSA's findings are not conclusive. "We're dealing with a small sliver of complaints," Kane said, adding that in low-speed cases, or incidents where an air bag doesn't deploy, no data will be recorded.
Besides, most Toyota vehicles before 2007 were not equipped with EDRs capable of storing pre-crash data, Kane said.
Moreover, if electronic throttle systems are blameless, why can't Toyota explain why complaints of sudden acceleration surged after the automaker adopted the system beginning in 2001, the analysts asked.
Since 2000, US regulators have been investigating whether electronic throttles in Toyota vehicles could have developed glitches that triggered unintended acceleration complaints. The sudden acceleration problem has been linked to at least 71 Toyota crashes in the US, since 2000, reportedly killing 89 people.
Earlier this year, Toyota had paid a record $16.4 million fine to settle allegations by the US Department of Transportation that the automaker had failed to disclose the accelerator pedal problem to the US safety regulators besides ignoring evidence of acceleration problems for most of the past decade and failing to remedy the problem on time.
Since 2009, the automaker has recalled over 10 million vehicles worldwide, including 6.5 million in the US on account of various complaints that related to defective accelerator pedals, floor mats, brakes, seat-belts and electric window switch, among others. Some of the recalls include its top-selling models such as the Prius hybrid and the Camry sedan as well as its popular, top-end Lexus and Crown sedans.
The recalls made Toyota take a $2 billion hit to its earnings last year and the company faces multiple lawsuits tied to accidents caused by the defective vehicles.
Toyota's shares closed down 1.79 percent at 3020 yen on the Tokyo Stock Exchange on Wednesday.