Toyota to pay $1.2 billion to settle criminal probe
Washington: Toyota admitted that it hid information about defects that caused Toyota and Lexus vehicles to accelerate unexpectedly causing injuries and deaths and agreed to pay a record $1.2 billion to settle an investigation by
The company still faces wrongful death and injury lawsuits that have been consolidated in California state and federal courts. In December, Toyota filed court papers after saying that it's in settlement talks on nearly 400 US lawsuits, but some other cases aren't included in the talks.
The negotiations began less than two months after an Oklahoma jury awarded $3 million in damages to the injured driver of a 2005 Camry and to the family of a passenger who was killed.
The ruling was significant because Toyota had won all previous unintended acceleration cases that went to trial. It was also the first case where attorneys for plaintiffs argued that the car's electronics — in this case the software connected to a midsize Camry's electronic throttle-control system — were the cause of the unintended acceleration.
At the time, legal experts said the Oklahoma verdict might cause Toyota to consider a broad settlement of the remaining cases.
Toyota has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recalls of Camrys and other vehicles. The company has repeatedly denied the electronics are flawed.
No recalls have been issued related to problems with onboard electronics. In the Oklahoma case, Toyota attorneys theorized that the driver mistakenly pumped the gas pedal instead of the brake when her Camry ran through an intersection and slammed into an embankment.
But after the verdict, jurors told AP they believed the testimony of an expert who said he found flaws in the car's electronics.
While significant, the latest penalty isn't a severe hit to Toyota's finances. In its last fiscal quarter alone, Toyota posted a $5.2 billion profit, crediting strong global sales.
Toyota's US market share, however, has fallen more than 4 percentage points since unintended acceleration came to the forefront in August of 2009, when a California Highway Patrol officer and three others were killed in a fiery crash.
At the time, Toyota controlled 17.8 per cent of the US market. Gas prices were high, favoring Toyota's fuel-efficient small cars and hybrids. Detroit automakers were in serious financial trouble and had few fuel-efficient cars for sale.
By last month, though, Toyota's share totaled just 13.3 percent, according to Autodata Corp. Citi research analyst Itay Michaeli estimated last week that the recalls have cost Toyota more than 1 percentage point of market share. And the Detroit and South Korean automakers now sell more competitive small and midsize cars.
The Toyota case could foreshadow what's in store for General Motors. The same US attorney's office is investigating the Detroit auto giant for its slow response to a faulty ignition switch problem in older compact cars that has been linked to at least 31 crashes and 12 deaths. NHTSA also is investigating whether GM withheld information about the problem and could fine the automaker $35 million.
The negotiations began less than two months after an Oklahoma jury awarded $3 million in damages to the injured driver of a 2005 Camry and to the family of a passenger who was killed.
The ruling was significant because Toyota had won all previous unintended acceleration cases that went to trial. It was also the first case where attorneys for plaintiffs argued that the car's electronics — in this case the software connected to a midsize Camry's electronic throttle-control system — were the cause of the unintended acceleration.
At the time, legal experts said the Oklahoma verdict might cause Toyota to consider a broad settlement of the remaining cases.
Toyota has blamed drivers, stuck accelerators or floor mats that trapped the gas pedal for the acceleration claims that led to the big recalls of Camrys and other vehicles. The company has repeatedly denied the electronics are flawed.
No recalls have been issued related to problems with onboard electronics. In the Oklahoma case, Toyota attorneys theorized that the driver mistakenly pumped the gas pedal instead of the brake when her Camry ran through an intersection and slammed into an embankment.
But after the verdict, jurors told AP they believed the testimony of an expert who said he found flaws in the car's electronics.
While significant, the latest penalty isn't a severe hit to Toyota's finances. In its last fiscal quarter alone, Toyota posted a $5.2 billion profit, crediting strong global sales.
Toyota's US market share, however, has fallen more than 4 percentage points since unintended acceleration came to the forefront in August of 2009, when a California Highway Patrol officer and three others were killed in a fiery crash.
At the time, Toyota controlled 17.8 per cent of the US market. Gas prices were high, favoring Toyota's fuel-efficient small cars and hybrids. Detroit automakers were in serious financial trouble and had few fuel-efficient cars for sale.
By last month, though, Toyota's share totaled just 13.3 percent, according to Autodata Corp. Citi research analyst Itay Michaeli estimated last week that the recalls have cost Toyota more than 1 percentage point of market share. And the Detroit and South Korean automakers now sell more competitive small and midsize cars.
The Toyota case could foreshadow what's in store for General Motors. The same US attorney's office is investigating the Detroit auto giant for its slow response to a faulty ignition switch problem in older compact cars that has been linked to at least 31 crashes and 12 deaths. NHTSA also is investigating whether GM withheld information about the problem and could fine the automaker $35 million.