NHTSA Opens Toyota Prius Probe

WASHINGTON/TOKYO June 2, 2005; Reuters reported that the NHTSA is investigating Toyota Motor Corp.'s popular Prius gasoline-electric hybrid sedan over complaints about sudden engine stalling, safety regulators said on Wednesday.

The National Highway Traffic Safety Administration opened a preliminary evaluation this week of 2004 and 2005 model year Prius cars -- roughly 75,000 vehicles -- after receiving 33 complaints about engine problems, some of which occurred at highway speeds.

"All of the complaints reported that the (combustion) engine shut down suddenly without warning," according to a summary of complaints prepared by highway safety investigators. All but five involved 2004 model year vehicles.

The second-generation Prius, equipped with Toyota's new gasoline-electric hybrid system, is now the auto maker's third-best selling passenger car in the United States, and its runaway success has convinced some rivals such as Ford Motor Co. to follow Toyota's lead into the hybrid market.

Japan's biggest auto maker is betting on hybrid technology -- which twins a combustion engine with an electric motor and battery -- to become the leading choice for fuel-efficient cars in the long term even as competitors like General Motors Corp. place their bets on hydrogen-powered fuel-cell vehicles.

Toyota needs the Prius and other hybrid models such as the Lexus RX400h SUV to succeed to reach its goal of selling 300,000 of the fuel-sipping vehicles annually by this year or next.

Analysts said it was too early to tell what impact the result of the investigation would have on Toyota. But they said product glitches rarely affect demand for individual cars, and that Prius sales would likely remain robust barring any serious accidents.

"It all depends on how critical the problem is, but at this level there shouldn't be too much concern over the impact on demand," said Takaki Nakanishi, a Tokyo-based analyst at UBS Securities.

Regulators said that in more than 85 percent of the complaints it was said the Prius stalled between 35 and 65 mph. Some drivers were able to operate the vehicle in electric mode for a time. About half said the car would not restart and had to be towed.

No accidents were reported.

The preliminary evaluation will determine the accuracy of complaints, the safety impact and whether the investigation should be expanded.

The Prius, also sold in Europe and Japan, is the most popular hybrid on U.S. roads. Customers usually wait months to buy one in the United States, where hybrids have gained traction with gasoline prices at record levels and some states, such as California, imposing tough emissions standards.

The Prius gets up to 60 miles per gallon (25 km per litre), or about twice as much as a similar-sized sedan.

Its U.S. sales more than doubled last year to nearly 54,000 vehicles. So far this year, sales are above 43,000.

Toyota said in mid-May that it was looking into more than a dozen stalling complaints and would review service records. At the time, Toyota dealers attributed the problem to a software glitch, some complaints showed.

Allison Takahashi, a Toyota spokeswoman, said the company was cooperating with regulators.

Consumers have given the Prius the highest initial mechanical quality rating on a scale of five in a survey by researcher J.D. Power and Associates.

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