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Toyota dealers brace for sales halt; 'it could be devastating'

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Toyota dealers brace for sales halt; 'it could be devastating'

Kathy Jackson

Automotive News -- January 27, 2010 - 12:01 am ET

LOS ANGELES -- Toyota dealers said they were jolted by what they believe is the automaker's first suspension of U. S. sales but said the company is doing the right thing.

Toyota Motor Sales U.S.A. said late Tuesday it will stop sales of eight models and halt production while pursuing fixes for the vehicles recalled last week for sticking accelerator pedals. Among them is the Toyota Camry, the nation's best-selling car.

Meantime, Toyota held a conference call with some dealers late Tuesday and told them to give any complaining customers a rental car at Toyota's expense. Dealers said Toyota will allow the customers to keep the rental cars until a fix is made.

“My main concern is my customers,” said Earl Stewart, a dealer in West Palm Beach, Fla.

He said he began providing customers with rental cars at his own expense when the recall was announced last week.

“They say this is a wear-and-tear item,” Stewart said. “But some of these are brand new Camrys. We sold these brand new cars and told customers not to worry,” he added. “Now they're telling us we can't sell the new ones.”

Output will be stopped for the week of Feb. 1 at plants that make the eight models involved in the recall. Two are in Indiana, with one each in Texas, Kentucky and Canada. A total of 2.3 million vehicles are involved. This is on top of 4.2 million vehicles Toyota recalled last fall to address floor mats that were prone to jam pedals and cause unintended acceleration.

Dealers say they have never known Toyota to stop sales before.

Ernie Boch Jr., Toyota's second-largest U.S. retailer and one of its biggest dealer advertisers, said he didn't know if he would continue to runs ads. “I'll get in there tomorrow and make a decision,” he said, referring to his store in Norwood, Mass. “But I still think Toyota is doing what they think is right.''

Toyota said after last week's recall that a mechanism in the pedal wears prematurely, causing it to stick.

In addition to the 2007-10 Camry, the vehicles affected by the latest action are the 2005-2010 Avalon; 2007-2010 Tundra; 2008-2010 Sequoia; 2009-2010 RAV4, Corolla and Matrix; and 2010 Highlander.

The stop sale comes at a critical time for Toyota and its dealers. Toyota, determined to remain the No. 1 selling brand in this country, this month initiated aggressive leases and dealer- and customer-cash programs to reel in customers.

Boch said some Toyota customers are refusing to take possession of their new vehicle until they know it's in tip top shape.

“There are enough of them saying that to warrant my attention,” he said. “They're saying fix it; then I'll take it. If this lasts a long time, it could be devastating for me.”

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