Toyota Motor shares were down 7 percent on the New York Stock Exchange in morning trading, following the company's unprecedented decision to discontinue eight of its most popular models in the U.S. following reported problems with the accelerators.
American Depositary Shares were down $6.26, or 7.21 percent to $80.52 at 10:35 a.m. EST.
As of Feb. 1, the company will halt production of eight models, including the Camry and Corolla sedans, two of the biggest sellers in North America. Collectively, the models made up 57 percent of the company's total sales in the U.S.
Here's a list of models involved in the latest recall:
• 2009-10 RAV4 • 2009-10 Corolla • 2009-10 Matrix • 2005-10 Avalon • 2007-10 Camry • 2010 Highlander • 2007-10 Tundra • 2008-10 Sequoia
Last week, Toyota issued a recall for the same eight models affecting 2.3 million vehicles. That adds to an earlier recall of 4.2 million Toyota- and Lexus-branded vehicles that were reported of having problems with the pedals' getting trapped by floor mats.
As part of the recall, we are obliged to suspend sales until there is a remedy...but the advice for customers remains the same, Toyota spokesman Mike Michels tells Drive On.
While Toyota's recall was voluntary, Toyota says it's following government protocols that require it to stop selling cars unless it has an immediate remedy, and it doesn't. It can fix the part that can wear and cause unintended acceleration in all the cars right away.
Two years ago, Toyota beat out General Motors Co. to become the world's largest automaker after it filed for bankruptcy. Now just weeks into 2010, it is stopping sales in its biggest market, the U.S., at a time when it desperately needs to sell cars here after reporting its first-ever annual loss last year.
The damage of the recall in the U.S. is estimated to cost the Japanese carmaker about $446 million to $502 million a week, according to research notes by Kurt Sanger, autos analyst at Deutsche Bank.
The company reported a record net loss of 436.94 billion yen in its fiscal year ended March.
Toyota is expected to announce around 2 million vehicle recalls in Europe today after defective gas pedals have been reported, according to Wall Street Journal sources.