UPDATE 3-Toyota fined $17.35 mln for U.S. floormat recall delay

Bijoy Anandoth Koyitty
Reuters Middle East

* Fine highest ever for delay in reporting a recall

* Fine related to June recall of Lexus vehicles

* Toyota agrees to settlement without admitting violation

Dec 18 (Reuters) - Toyota Motor Corp has agreed to

a record fine of $17.35 million for failing to report a safety

defect to the U.S. government in a timely manner, but maintained

it has done nothing wrong.

Toyota announced a recall of 154,036 2010 Lexus RX 350 and

RX 450h vehicles in June to address a risk that a loose floormat

could force down the accelerator pedal.

The U.S. Department of Transportation said the fine was the

highest ever for not initiating a recall in a timely manner. ()

This year's recall followed a string of damaging safety

recalls from Toyota, the world's top automaker, since 2009.

Certain unintended acceleration claims made against some

models caused a worldwide recall of nearly 19 million vehicles

from late 2009 to early 2011.

Toyota in a statement said it agreed to the settlement

without admitting any violation of its U.S. safety obligations.

"We agreed to this settlement in order to avoid a

time-consuming dispute and to focus fully on our shared

commitment with NHTSA to keep drivers safe," Ray Tanguay, chief

quality officer of Toyota North America, said in a statement. ()

The Department of Transport's National Highway Traffic

Safety Administration (NHTSA) said it contacted Toyota in May

after it noticed a trend of "floor mat pedal entrapments" in

vehicle owner questionnaires.

Toyota advised the safety agency a month later that it was

aware of 63 alleged incidents and said it would launch the


Federal law requires automakers to notify the agency within

five business days of determining that a safety defect exists

and to conduct a recall.

"Every moment of delay has the potential to lead to deaths

or injuries on our nation's highways," said David Strickland,

the Administrator of the highway safety agency.


The penalties come a month after Toyota said it would recall

about 2.77 million vehicles worldwide, including some of its

popular Prius hybrid cars, for steering and water pump problems.

The carmaker was fined a total of $48.8 million in civil

penalties in 2010 as a result of three separate investigations

into its handling of vehicle recalls.

Analysts said Tuesday's NHTSA fine would not have any

significant impact on demand.

"Consumers tend to gloss over these events. A lot of the

decision-making is based on products in the showroom, and in

that respect, Toyota is very competitive," Polk analyst Tom

Libby said.

Matthew Stover, an analyst with Guggenheim Securities, said

there would be minimal financial impact from the penalties.

"Recalls in general don't have an impact on sales like they

used to," Stover said.

Toyota maintained from the start of its worst safety crisis

ever that the floor mat pedal entrapment issue was linked to

floormats pinning gas pedals down rather than a systemic

electronic problem.

Department of Transportation Secretary Ray LaHood said in

early 2011 a federal probe essentially agreed with the company's


The U.S. auto safety regulators in April this year announced

a proposal that would require brake override systems -- that can

stop a vehicle if the accelerator pedal gets stuck open -- on

all new passenger cars and trucks, likely by the 2015 model


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