Apologetic Toyota looking to outside quality input

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Toyota Motor Corp's president apologized on Friday for safety problems and said the company would bring in outside experts to review quality controls, an unusual action for a company that has enjoyed a reputation for high standards.

"I would like to take this opportunity to apologize from the bottom of my heart for causing many of our customers concern after the recalls across several models in several regions," Akio Toyoda, the grandson of Toyota's founder, told a news conference in Nagoya, Japan.

Toyoda's comments were his most extensive since the latest recall began in January. Toyota has issued two recalls since last November.

The company's shares, which have taken a beating in recent sessions, rose as much as 4.1 percent to USD 74.73 on the New York Stock Exchange on Friday. Since Jan. 21, Toyota has lost USD 30 billion or a fifth of its market value.

Credit ratings agency Standard & Poor's put Toyota and some of its suppliers on watch for a possible downgrade citing "increased concern over the potential negative impact on Toyota's business profile of unfolding developments related to recent quality issues."

Toyota, the world's largest automaker, has recalled more than 8 million vehicles around the world for problems with accelerators. Episodes of unintended acceleration in Toyota vehicles have been linked to up to 19 crash deaths in the United States over the past decade.

Toyota is also mulling a recall of Prius, its top-selling hybrid, for a braking problem.

The company has estimated that lost production, lost sales, parts to fix problems, staff training and repairs to recalled vehicles will cost Toyota USD 2 billion from January to the end of March.

The news conference came after US competitor Ford Motor Co readied a solution for braking problems on two of its hybrid models, the hybrid Fusion and Mercury Milan.

CARMAKER IN CRISIS
Toyoda apologized for safety problems that have left the Japanese carmaker "in crisis".

He said Toyota would strengthen its inspection process, respond faster to customer complaints and seek input from outside experts.

Toyoda also pledged to set up and oversee a quality improvement task force involving external experts monitoring quality management. It was not clear how the global quality management committee would function.

Turning to independent experts is "about as good as you can expect," said UBS analyst Philippe Houchois.

"I've seen a lot of recalls, but I don't remember seeing that step of getting an outside expert. That's quite an innovative or aggressive approach to try to solve the problem," he said.

Toyota Europe's spokeswoman Maria Mack said, "This is not the first time we have consulted with external parties, but this is a more structural approach.

"It is a new idea in the way it is conceived. It is the first time there will be a really formalized approach."

The crisis generated by the recalls and the way the 77-year-old company has handled itself publicly have led to widespread criticism.

Toyoda, 53, bowed in apology after addressing the news conference and answered other questions, some in English, after an official tried to end the late-night session.

He asked investors to "continue to support us with a long-term view."

Kazutaka Oshima, president of Rakuten Investment Management, said investors needed answers. "Toyoda is responsible for explaining to shareholders since they have lost a significant part of their assets."

Toyoda became the company's president last year, promising to steer it out of its worst downturn in history and bring greater transparency to its corporate culture.