A government probe cleared Toyota Motor Corp's electronics of causing unintended acceleration, a big victory for the world's top automaker as it seeks to recover from the hit it took over runaway vehicle accidents.
The findings vindicated Toyota's position that it had identified and fixed the only known safety problems with popular vehicles like the Camry by focusing on mechanical issues with accelerator pedals and the risk that floormats could trap the pedal in the open position.
There is no electronic-based cause for unintended high-speed acceleration in Toyotas, U.S. Transportation Secretary Ray LaHood said in a statement on Tuesday.
Toyota's U.S.-traded shares closed 4 percent higher, buoyed by the government findings and the automaker's smaller than expected dip in quarterly earnings and higher sales forecast.
The probe by National Highway Traffic Safety Administration and NASA engineers followed questions by some safety advocates and lawmakers about whether software-driven throttles and flaws with electronic control systems had also played a role in unintended acceleration complaints.
Although Toyota has cleared a major hurdle in its ongoing safety saga, analysts cautioned that it would still struggle to win back American consumers who have defected from the brand and its luxury counterpart Lexus.
This is certainly going to help Toyota, but it doesn't change the fact that they let these other issues through, said TrueCar.com analyst Jesse Toprak. They're still going to face difficulties to bring people back to Toyota.
Toyota has recalled nearly 16 million vehicles globally since September 2009 when it took the first in a series of measures to fix problems with sticky accelerator pedals and potentially dangerous floormats.
The massive recalls in 2009 and 2010 rocked Toyota to its foundations and saw President Akio Toyoda come to Washington a year ago to tell U.S. lawmakers he was deeply sorry.
The automaker has also paid nearly $50 million in penalties to the United States over the timeliness of its recalls.
Toyota lost ground in the U.S. market in 2010, its market share fell from 17 percent at the end of 2009 to just over 15 percent in December.
U.S. safety regulators said they would consider imposing requirements for all vehicles to have brake override systems that automatically counteract any instances of unintended acceleration.
U.S. officials are looking into 89 deaths that may be associated with sudden acceleration in Toyota and Lexus vehicles but have so far linked only a handful to the floor mat problem.
Although the electronic throttle investigation turned up no flaws that would prompt another massive recall, Toyota still faces significant risks from scores of civil lawsuits stemming from the recalls.
Those cases in federal and state courts, which may turn on the timing of company disclosures to regulators of already established defects, have an estimated potential liability of up to $10 billion.
(Reporting by John Crawley and David Lawder, additional reporting by Kevin Krolicki in Detroit; Editing by Tim Dobbyn)