Toyota Recalls Three Million Cars

Toyota recall three million vehicles due to faulty seays

Toyota Motor Corp. is calling for 2.87 million SUVs across the globe due to faulty seat belts as claimed by the company on Thursday.

It was deduced that the seat belts could actually be ripped apart if they got in contact with metal seat frames. They would eventually get severed during a frontal crash. The decision was taken when a fatal accident was reported in Canada and another in the United States- where one individual was injured. As per the company, the recall was due to a defect found in the design, which can be fixed with the installation of a resin cover for the frames free of cost. The vehicles that have been recalled encompass EV, RAV, RAV4 and Vanguard SUVs.

 As per the data revealed by the company, the vehicles that have been affected encompass 625,000 cars in Europe and 434,000 cars in China.

Back in May, 2015 the company recalled almost 5 million cars across the globe. This included 637,000 cars in the United States which had the Takata air bags. These airbags were likely to fall apart during a fatal accident which could result in injury. Almost 14 automakers across the globw asked for 24 million cars to get a replacement for the Takata air bags. This was said to be the largest auto safety recall in the history of the United States.

During the present annum, Toyota Motors  seems to be on track and might just record high annual operating profit margins that are driven by growth for its Luxury Lexus and RAV4 SUVs. During the first nine months of the fiscal year of 2016, the company’s operating income has superseded 9% on a year over year basis to $20.31 billion. For the complete fiscal year, analyst predicts that $26.99 billion is operating income which has risen from $25.33 billion in FY15. It needs to be noted that the high recall costs can exert pressure on the bottom line during the fiscal year of 2016. The results are expected by May 6, 2016.

Back in 2015, Toyota Motors Corp. delivered almost 10.15 million cars across the globe where it was said to be the global market dominator in terms of sales volume. Considering the diesel engine scandal that took place, Volkswagen AG was said to be in the second place by selling 9.93 million cars. On the other hand, General Motors was successful in delivering 9.8 million cars across the globe last annum.

During the present year, the automotive market across the globe is buoyed via purchase tax stimulus governed by Chinese authorities. On the other hand, the United States has the potential to persist with high growth due to the low fuel costs. Considering the company’s performance over the past year, Toyota can maintain its strong hold in the industry this year as well.

Hence, the decision taken by the company can save several lives. The recall is on a mass level and ascertains the fact that the company cares about the safety of its clients.