Toyota Will Pay $1.6 Billion Over Faulty Accelerator Suit

Owners who sold their vehicles at a loss through trade-ins and resale will receive from $125 to $10,000, depending on the level of depreciation. The settlement represents the end of the economic battle between Toyota and customers after several years of allegations of mechanical and electronic defects, though it does not cover individual personal-injury and wrongful death lawsuits that are still pending.

“This agreement allows us to resolve a legacy legal issue in a way that provides significant value to our customers and demonstrates that they can depend on Toyota to stand behind our vehicles,” said Celeste Migliore, National Business and Field Communications manager for Toyota Motor Sales, U.S.A., Inc. The automaker will take a one-time $1.1 billion charge to its earnings cover the settlement costs.

James V. Selna, United States District Court judge of the Central District of California, who presided over the suit since 2010 after widespread reports of complaints and accidents related to unintended acceleration, granted final approval after the terms were proposed in December.

The settlement is “extraordinary because every single dollar in the cash fund will go to claimants,” Judge Selna said in a statement. A decision posted to the court’s Web site calls the settlement “fair, adequate and reasonable.”

Toyota is required as part of the agreement to install safety upgrades in about 3.2 million of its vehicles. The automaker is to establish two funds of $250 million to compensate owners not eligible for safety upgrades and those who sold their cars between Sept. 1, 2009, and Dec. 31, 2010, at a loss.

The settlement also requires Toyota to pay $30 million for automotive safety research on driver behavior and unintended acceleration. It would also provide a customer support program for more than 16 million current Toyota owners, who will be eligible for free repairs on certain parts for up to 10 years.

The sudden acceleration problems marred Toyota’s reputation for quality. The automaker eventually recalled more than 11 million vehicles in connection with problems including floor mats that caused the accelerator to get stuck.

Steve Berman, who represented the plaintiffs in the class-action suit, called the settlement “a significant financial recovery.”

“This is a great settlement for consumers,” he said in a statement. “It includes both safety fixes to make Toyota vehicles safer as well as monetary relief for owners who saw a reduction in their vehicle’s value.”

Toyota Will Pay $1.6 Billion Over Faulty Accelerator Suit

Owners who sold their vehicles at a loss through trade-ins and resale will receive from $125 to $10,000, depending on the level of depreciation. The settlement represents the end of the economic battle between Toyota and customers after several years of allegations of mechanical and electronic defects, though it does not cover individual personal-injury and wrongful death lawsuits that are still pending.

“This agreement allows us to resolve a legacy legal issue in a way that provides significant value to our customers and demonstrates that they can depend on Toyota to stand behind our vehicles,” said Celeste Migliore, National Business and Field Communications manager for Toyota Motor Sales, U.S.A., Inc. The automaker will take a one-time $1.1 billion charge to its earnings cover the settlement costs.

James V. Selna, United States District Court judge of the Central District of California, who presided over the suit since 2010 after widespread reports of complaints and accidents related to unintended acceleration, granted final approval after the terms were proposed in December.

The settlement is “extraordinary because every single dollar in the cash fund will go to claimants,” Judge Selna said in a statement. A decision posted to the court’s Web site calls the settlement “fair, adequate and reasonable.”

Toyota is required as part of the agreement to install safety upgrades in about 3.2 million of its vehicles. The automaker is to establish two funds of $250 million to compensate owners not eligible for safety upgrades and those who sold their cars between Sept. 1, 2009, and Dec. 31, 2010, at a loss.

The settlement also requires Toyota to pay $30 million for automotive safety research on driver behavior and unintended acceleration. It would also provide a customer support program for more than 16 million current Toyota owners, who will be eligible for free repairs on certain parts for up to 10 years.

The sudden acceleration problems marred Toyota’s reputation for quality. The automaker eventually recalled more than 11 million vehicles in connection with problems including floor mats that caused the accelerator to get stuck.

Steve Berman, who represented the plaintiffs in the class-action suit, called the settlement “a significant financial recovery.”

“This is a great settlement for consumers,” he said in a statement. “It includes both safety fixes to make Toyota vehicles safer as well as monetary relief for owners who saw a reduction in their vehicle’s value.”

Battered by Crises, Toyota Declares a Rebirth

The Crown, the preferred ride of staid Japanese executives, had gotten an edgy makeover. With a new oversize grille, vamped-up hybrid engine and an unveiling at a fashion mall, there was nothing stodgy about this car.

“Reborn,” read a logo beamed onto a large screen.

“My initial reaction was: ‘You’re kidding! Please, not pink,’ ” Akio Toyoda, the Toyota chief executive and a scion of the Japanese automaker’s founding family, told reporters at the event. “But being reborn does mean taking on new challenges.”

Toyota has spent much of the last year trying to leave behind what has been a tumultuous four years in which the automaker booked its largest loss ever, became embroiled in a recall scandal, struggled with a decimated supply chain after the 2011 tsunami and weathered the punishing effects of a strong yen.

One by one, the pieces have been falling into place.

In 2012, Toyota leapfrogged General Motors and Volkswagen to regain its title as the world’s largest automaker, selling 9.7 million vehicles, a record for the company. Now the company is on the cusp of a recovery, analysts say, that could put it on track to post the kind of growth promised before the crises.

“Toyota is now in the position — for the first time in years — where it is beating market expectations while its peers are disappointing,” Clive Wiggins, a Tokyo-based autos analyst for Macquarie, said in a recent note to clients. “We expect earnings to continue beating expectations over the next three years.”

Last week, Toyota agreed to pay more than $1 billion to settle a class-action suit over claims that its electronic malfunctions caused its cars to accelerate without warning, one of the largest payouts ever for an automotive lawsuit. Toyota still faces personal injury and wrongful death lawsuits, as well as an unfair business practices case brought by 28 attorneys general in the United States. But the company’s $1.1 billion charge against earnings for the class action was seen as a significant step toward closing the chapter on its recall problems.

There have been other signs of change. The company supply chain bounced back more quickly than predicted, profits are on the rise and the yen has started to weaken after the newly installed prime minister, Shinzo Abe, promised to drive down that currency.

And there is a loud message of change being sounded through the stepped-up emphasis on design — with both Toyota and Lexus models getting new looks, including the pink Crown. “It’s actually a beautiful color,” Mr. Toyoda said.

Toyota’s rebound has been centered in the United States, where its sales increased 28.8 percent last year to 1.88 million vehicles through November. That’s more than double the industrywide increase of 13.9 percent over the same period.

The biggest contributors have been stalwart products such as the Camry, and the expanded line of Prius hybrid models. Through November, combined sales of Prius cars had risen 81.3 percent in 2012, as the company continued to dominate the hybrid segment.

The company is also betting on a revamped version of a perennial also-ran, the Avalon sedan. Sales of the current version of the car were down 5 percent last year. The new model, with its wide-mouth grille and sculptured headlamps, reflects the company’s efforts to appeal to younger buyers. Toyota is trying to shave 10 years off the average age of buyers, now in the mid-60s.

The Avalon, which was designed and engineered in Michigan and is being built at Toyota’s assembly plant in Kentucky, is also a test of how much Japanese officials can delegate decision-making to the company’s subsidiaries. Promoted as Toyota’s most American vehicle ever, the Avalon is the first Toyota prototype not developed in Japan but at the sprawling Toyota Technical Center near Ann Arbor, Mich., where 1,100 employees work.

Hiroko Tabuchi reported from Tokyo and Bill Vlasic from Detroit.

Wheels: Toyota to Pay Record $17.35 Million Fine for Delaying Recall

Kimimasa Mayama/European Pressphoto Agency For the fourth time in two years, Toyota has agreed to pay fines related to allegations of delaying safety recalls.

For the fourth time, Toyota has agreed to pay a fine to settle allegations by the National Highway Traffic Safety Administration that the automaker delayed a safety recall.

In a news release Tuesday morning, the safety agency said Toyota would pay $17.35 million, the maximum allowed by law.

Toyota did not admit any wrongdoing and said it was paying the fine to avoid a continued dispute with the safety agency. The automaker said the same thing when agreeing to pay the three previous fines, which totaled $48.8 million.

The recall the safety agency said was delayed occurred last June and covered 154,036 sport utility vehicles — the 2010 Lexus RX 350 and RX 450h — to fix a problem that might allow the floor mat to become snagged on the gas pedal.

The safety agency contends that those vehicles should have been included in an October 2009 recall of 3.8 million vehicles for the same issue.

But the agency says it was not until early this year — after it contacted Toyota about consumer complaints of floor-mat problems on the two 2010 Lexus models — that the automaker agreed the recall should be expanded.

In a statement, Toyota said it was “dedicated to the safety of our customers and we continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customers’ needs.”

The safety agency described the $17.35 million fine as a record. That is the maximum currently allowed by law; the amount is periodically increased to reflect inflation.

Some consumer safety advocates, like Clarence M. Ditlow, the executive director of the Center for Auto Safety, have long argued that such amounts are no more than a “rounding error” for automakers and that to make companies take their responsibility more seriously, auto executives should face criminal penalties.

The previous fines occurred in April 2010 and twice in December 2010.

Toyota routinely describes its recalls as “voluntary,” but under federal regulations once a manufacturer is aware of a safety problem it has five business days to inform the agency of its plan for a recall.