Toyota US sales hit by recall; Honda raises outlook

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Toyota Motor Corp suffered a sharp drop in US sales last month as its massive recall and unprecedented sales halt allowed rivals to grab market share from the world's largest automaker.

Honda Motor Co was not the biggest beneficiary of Toyota's woes in January, but raised its forecast for the year to March after reporting its strongest quarterly profit in a year-and-a-half led by motorcycle sales.

In the latest blow to its once gold-plated quality image, Toyota said on Wednesday dealers in both the United States and Japan had reported complaints from buyers over the brakes in its new model Prius hybrid.

Toyota pulled eight of its most popular models including the Camry, Corolla and Rav4 from US showrooms in the last week of January following complaints over sticking accelerator pedals.

Toyota's monthly sales fell 16 percent and its US market share fell to its lowest level since January 2006 as rivals Ford Motor Co and General Motors Corp surged past. Its monthly US sales dropped below 100,000 vehicles for the first time in more than a decade.

"Auto sales and market share is kind of like a high-speed road race and if you get caught up in the gravel on the shoulder you can get passed really fast, and essentially that is what happened to Toyota," Autoconomy analyst Erich Merkle said.

"Right now we have to find out how long it is going to take them to get back on pavement again," Merkle said.

As Toyota sales fell, Ford and Hyundai Motor Co emerged as the big winners, each posting 24 percent sales gains.

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Toyota's weak sales report came as US Transportation Secretary Ray LaHood took a harder line with the automaker for what he said was a slow response to safety complaints.

"We're not finished with Toyota," LaHood said in an emailed statement to Reuters.

US government officials said Toyota could face both an unusual civil penalty because of the recall and an expanded probe that would focus on electric controls. Either development could further damage the Japanese automaker's once-unassailable reputation for quality.

On top of a separate recall for slipping floormats also linked to unintended acceleration, some 8.1 million Toyota vehicles are now being recalled, more than its total group sales last year.

Regarding the Prius, a Toyota spokeswoman said the company was investigating several dozen complaints since December over what drivers characterised as insufficient braking when driving over bumpy or frozen roads.