The Car and Truck Fleet and Leasing Management Magazine

Toyota and NHTSA Reach Settlement, Automaker to Pay $17.35 Million

December 18, 2012

WASHINGTON – Toyota Motor Corp. has agreed to pay $17.35 million, the maximum fine allowable under the law, to settle National Highway Traffic Safety Administration allegations that the automaker failed to report a safety defect to the federal government in a timely manner. 

The fine is the single highest civil penalty ever paid to NHTSA for violations stemming from a recall. This fine settles NHTSA claims related to the timeliness of Toyota’s June 2012 Lexus recalls. This recall addressed the potential for accelerator pedal entrapment caused by unsecured or incompatible driver’s-side floor mats in the 2010 model-year Lexus RX 350 and RX 450h.

In a released statement, Toyota stressed that the settlement does not represent an admission to any violation of obligations established in the U.S. Safety Act.

Ray Tanguay, chief quality officer of Toyota North America, added: “Toyota is dedicated to the safety of our customers, and we continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customers' needs. We agreed to this settlement in order to avoid a time-consuming dispute and to focus fully on our shared commitment with NHTSA to keep drivers safe.”

Federal law requires all auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists, or that the vehicle doesn’t comply with federal motor vehicle safety standards, and to promptly conduct a recall.

"Every moment of delay has the potential to lead to deaths or injuries on our nation’s highways," said NHTSA Administrator David Strickland.

NHTSA said that in early 2012, the agency’s Office of Defects Investigation began noticing a trend in floor mat pedal entrapment in 2010 model-year Lexus RX 350s. This trend was identified using Vehicle Owner Questionnaires (VOQs) and Early Warning Reporting data.

In May, NHTSA contacted Toyota about the trend. A month later, Toyota advised NHTSA that it was aware of 63 alleged incidents of possible floor mat pedal entrapment in 2010 model-year Lexus RX 350s since 2009. Toyota's own technicians and dealer technicians reported that certain alleged incidents of unwanted acceleration had been caused by floor mat pedal entrapment.

In June, Toyota advised NHTSA of plans to conduct a recall of 154,036 2010 model-year Lexus RX 350 and RX 450h vehicles to address floor mat pedal entrapment.

As part of the new settlement, Toyota Motor Corp. and its U.S.-based subsidiaries agreed to make internal changes to their quality assurance and review of safety-related issues in the U.S.

The last time Toyota faced civil penalties was in 2010, when the automaker agreed to pay $48.8 million as a result of three separate investigations into the handling of auto recalls. 

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