Although Transportation Secretary Ray LaHood later called his remark an obvious misstatement, it drove Toyota shares down by as much as 8 percent and prompted one congressional committee to ask Toyota whether certain models were safe.
LaHood also said he would take the unusual step of calling Toyota President Akio Toyoda to emphasize how seriously the Obama administration is taking investigations into reports of uncontrolled acceleration in Toyota vehicles.
Our ... people will hold Toyota's feet to the fire to make sure they are going to do everything they said they were going to do to make the vehicles safe, he said.
The developments underscored the increasingly political overtones of a safety crisis that has hit Toyota sales, rocked confidence in a brand built on reputation for quality and made the Japanese automaker the target of late-night humor.
Comedian Jon Stewart used a segment of The Daily Show on Tuesday to skewer Toyota, pointing out Toyoda had been seen being chauffeured in an Audi.
Toyota urged consumers to take any vehicles experiencing problems with the accelerator to a dealership. But it also said that the problem did not appear suddenly, suggesting drivers would experience warning signs before a pedal became stuck.
Our message to Toyota owners is this -- if you experience any issues with your accelerator pedal, please contact your dealer without delay. If you are not experiencing any issues with your pedal, we are confident that your vehicle is safe to drive, the company said in a statement.
Separately, in another potential knock on its reputation for quality, Toyota said it was examining complaints about brakes in its new model Prius hybrid.
A Toyota spokeswoman said the company was investigating complaints over what drivers characterized as insufficient braking when traveling over bumpy or frozen roads.
Consumer advocate Ralph Nader said the U.S. government's auto-safety watchdog had not been tough enough with Toyota and urged President Barack Obama to strengthen the agency.
Nader, who gained prominence in the 1960s as author of the scathing auto industry expose Unsafe at Any Speed, called Toyota's recall a cheap fix that is too little too late.
Goldman Sachs downgraded Toyota to neutral from buy and said investors had now priced in a loss of up to 4 percentage points in the automaker's U.S. market share.
A setback on that order would put Toyota at about the current size of Honda Motor Co in the U.S. market or less than half the size of General Motors Co, now majority-owned by the U.S. government.
Goldman Sachs said in a note for clients that the cost to Toyota from lost sales and warranty-covered recalls was estimated at $1.6 billion through March.
Standard & Poor's equity analyst Efraim Levy also cut Toyota to a hold rating from a buy citing the automaker's tarnished image.
Toyota pulled eight of its most popular models including the Camry, Corolla and Rav4 from U.S. showrooms in the last week of January after it launched a recall for problems with sticky accelerator pedals made by supplier CTS Corp.
Earlier on Wednesday, LaHood had touched off a sharp sell-off in Toyota shares and a flood of calls to U.S. dealerships from panicked consumers when he appeared to tell Americans to stop driving Toyotas under recall.
My advice is if anybody owns one of these vehicles is to stop driving it and take it to a Toyota dealer because they believe they have the fix for it, he said.
The National Highway Traffic Safety Administration has said it will investigate whether Toyota's electronic throttle control system could be part of the problem behind reported instances of uncontrolled acceleration in its vehicles.
Toyota has said it found no evidence of any safety problems beyond those covered by recalls under way for accelerator pedals that can become stuck and the risk that floormats can trap an accelerator pedal on some models, including the Prius.
The automaker has recalled 8.1 million vehicles for both sets of problems around the world, including 5.5 million in the United States.
Up to 19 U.S. crash deaths over the past decade may be linked to accelerator-related problems at Toyota, congressional officials have said.
TOYOTA'S EXPLANATION QUESTIONED
Two congressional committees plan hearings this month on the Toyota recalls.
I am in no way certain that Toyota's explanation for the cause of incidents of sudden acceleration in its vehicles satisfies me, John Dingell, a Michigan Democrat and longtime ally of the U.S. auto industry, said on Wednesday.
House Oversight and Government Reform Committee Chairman Edolphus Towns, who is preparing for a February 10 hearing, asked Toyota North America chief Yoshimi Inaba in a letter to provide a detailed explanation of whether it is safe to drive Toyota models that have been recalled.
Toyota's 1,200 U.S. dealerships began to receive shipments of parts needed to fix faulty accelerators and many said they would hire new crews and stay open late to fix recalled cars as quickly as possible over the coming weeks.
LaHood's pledge to take his concerns directly to Toyota's chief executive puts the spotlight back on Toyoda, the grandson of the automaker's founder who took over the top job last year with a pledge to revive the values that helped the company win a reputation for top-notch quality.
Outside of a terse apology on the sidelines of the World Economic Forum in Davos last week, Toyoda has kept a low profile as the crisis has mounted.
Toyota suffered a 16 percent sales drop in its biggest market, the United States, last month as it was not able to sell about 60 percent of its U.S. inventory. Sales of models covered by the recall are not expected to resume until the third week of February, sources have said.
Toyota will have a further opportunity to address the issue when it issues third-quarter results, due on Thursday.
Toyota shares have fallen in eight of the past nine sessions and the company lost more than $25 billion in value since its initial U.S. accelerator pedal recall on January 21.
(Additional reporting by Soyoung Kim in Detroit, Chang-Ran Kim in Tokyo and Helen Massy-Beresford in Paris; Writing by Kevin Krolicki; editing by Jean Yoon, Erica Billingham, Matthew Lewis, Gary Hill)