Toyota nightmare: now the Prius is under scrutiny

Shares in Toyota, the world's largest carmaker, fell a further 3.5 per cent on the Tokyo Stock Exchange today, hitting their lowest level for 10 months amid escalating problems over the recall of more than eight million cars worldwide. In the US alone, the Japanese carmaker has recalled 4.5 million cars and been ordered to stop selling eight models.

The firm has lost more $30 billion of market value since January 22 and yesterday US transportation secretary Ray LaHood urged Toyota owners to simply "stop driving" before saying affected models should be returned to dealers.

It is believed that sticky accelerator pedals are causing "unintended acceleration" problems that have caused crashes and left some owners too anxious to take to the road. Apart from being a PR disaster for Toyota, it is still unclear where the fault lies.

For the cars under recall, the carmaker will fix a new washer in the assembly. But it could be a software problem (on many models there is no physical connection between the pedal and the carburetor) or something else - misplaced floor mats, for example.

To add to Toyota's woes, its celebrated Prius hybrid is now under scrutiny as well. The carmaker says it has received complaints that the car's brakes can fail on bumpy roads or under icy conditions. Apple computer co-founder Steve Wozniak told a conference in San Francisco his Prius "has an accelerator that goes wild but only under certain conditions of cruise control." In Wozniak's opinion - and he wrote code for Apple - this was certainly a software problem.

Car market consultants say if the recall is extended to its top-selling hybrid vehicle, Toyota's problems will really mount. "The Prius is Toyota's flagship model, its key to the future," said Ashvin Chotai of  Intelligence Automotive Asia Ltd. "If that model gets tainted, that would suggest Toyota's crisis has moved on to the next level."

The company has been widely critcised for moving too slowly on the issue.  "We're going to hold Toyota's feet to the fire," LaHood said yesterday. At one press conference, a Toyota representative appeared wearing a facemask - hardly an encouraging sight. And of course, there are growing theories that the US government could be exaggerating the issue.

Since it is now majority shareholder in both GM and Chrysler - and responsible for regulating all car companies - boosting domestic manufacturers at the expense of foreign-owned firms is self-evidently advantageous. But like most conspiracy theories, it's just an idea, and not easy to prove or disprove.

So what's Toyota's problem? The company says it has ruled out electronics as the cause of sudden acceleration. Yet at least 15 seven lawsuits claim an electronic throttle system called ETCS-i is at fault.

In a lawsuit filed after the recall last month, owner Alfred Pena said his 2008 Toyota Avalon unexpectedly accelerated at a stop sign on January 14, causing a collision. He said his wife Sylvia "was sitting dead still". As she took her foot off the brake - but before touching the accelerator - the car roared off. "My belief is that fixed Toyotas with new pedals will still inadvertently accelerate," Pena's lawyer
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