Toyota: Stop-sale order will have 'minimal' impact

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A potential defect that is preventing Toyota dealers from selling some vehicles on their lots had little effect on January sales and is expected to have a “minimal” impact in February, company executives said today.

“We’re in the process of repairing those vehicles that are in dealer stock,” Bill Fay, Toyota Division’s general manager, said in a conference call. “We have plenty of stock heading into February. It shouldn’t be much of an interruption to our business.”

Instead, Fay said frigid temperatures and a 10,000-unit drop in fleet deliveries were the main reasons that Toyota Motor Sales U.S.A. posted a 7 percent year-over-year decline last month. Sales were down 9 percent for Toyota Division and up 9 percent for Lexus, the company said in a statement.

Toyota issued a stop-sale order last Thursday on six nameplates, including the Avalon, Camry and Corolla, after it discovered that padding around seat heaters does not comply with federal safety standards. The order covers only cars with heated seats and affects about 10 percent of the company’s inventory, Fay said.

The stop-sale order affected only the last two days of January. Fay said he expects dealers to finish replacing the padding on vehicles in their inventories within “a couple of weeks.”

No injuries or other incidents have been reported, and Toyota is asking federal safety regulators not to require a recall of the affected vehicles that already had been sold.

“It’s really more of a compliance issue, not necessarily a safety issue,” Fay said.

Fay said dealers had about 300,000 vehicles in inventory at the beginning of February.

Toyota Motor Sales delivered about 14,000 vehicles to fleet buyers last month, down from some 24,000 vehicles in January 2013, Fay said. That accounts for most of the company’s overall sales decline of 11,360 units.

Sales fell 27 percent for the Camry, 23 percent for the Prius and 5 percent for the Corolla. Sales of the Avalon, on which seat heaters come standard, were down 12 percent.

The company’s car sales decreased 17 percent, while light-truck sales rose 7 percent. The Toyota RAV4 posted a 45 percent increase, and the Tundra managed a 13 percent gain, even though sales of pickups made by Ford Motor Co. and General Motors declined last month.

You can reach Nick Bunkley at nbunkley@crain.com. -- Follow Nick on Twitter


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