Toyota Recalls and Massive Owner Concern Could Create Huge Boom for American Auto Industry

For years people have purchased vehicles produced in Japan and manufactured by Japanese manufacturing plants located in the US and around the world for one reason and one reason alone. Perceived quality and safety.

The recent news on Japanese auto giant Toyota seems to point out that they may have known about the problems with brake systems and throttle pedals for some time and that they may have been attempting to side step the possible brunt of the needed repairs to fix the problems that consumers faced. This news alone may finally break the misconceived notion that the Japanese auto industry has a better product and it may inadvertently bring the American auto industry roaring back to life once again. Japan might finally be awaking a slumbering giant, once again.

US Toyota stock (TM) and the Nikkie listed Toyota Motor Corp. Stock (TYO) is plummeting currently and may find itself locked in a free fall that would seem to echo the sentiments of the company's current customer base.

The American auto manufacturers need to capitalise on this as fast as possible to see the full impact that this may have on the bottom line for themselves and the American economy.

Ford, the only American auto maker who did not dip into the governments cookie jar and take bailout funds, may be properly positioned to capitalize on this latest set of events the quickest.

Ford Motor Company of Canada kicked off 2010 with retail sales up 16%. This marks the company's eighth straight month of retail sales gains. January saw Lincoln sales achieve a 59% increase.

Ford’s F-Series, America’s best-selling truck for 33 years in a row and best-selling vehicle, car or truck for 28 years in row, posted a 9% sales increase in January, and the Ford Ranger compact pickup sales were up 47%.

Ford's crossover utilities also posted strong sales increases. In 2009, the Ford brand was the top-selling brand of crossovers in the U.S., led by the Ford Escape. In January, Escape sales were up 29% versus a year ago, Ford Edge sales were up 26% and Lincoln MKX sales were up 27%. And that is nothing compared to Ford's China sales data.

Ford reported sales of 30,759 Ford brand passenger vehicles in China during the month of January alone. That's an increase of 128% when compared to the same period last year, marking its twelfth consecutive month of year-on-year growth in the Chinese market.

“Ford’s focus on building products consumers want to buy and love to drive will continue,” said Ken Czubay, Ford vice president, U.S. Marketing Sales and Service. “In 2010, we will give Ford customers even more reasons to Drive One.”

The Ford Fusion was recently named Motor Trend’s Car of the Year and posted a January sales increase of 49%. The Fusion Hybrid recently was named North American Car of the Year. Fusion and Mercury Milan are the most fuel-efficient mid-size sedans in America.

Bloomberg reports that with Toyota halting sales of the 8 effected models, Toyota dealers in the US stand to lose almost $2.47 billion every month. That's bad news for an automotive market already beaten down from years of slow sales and lackluster automotive offerings.

That loss is just the beginning as Toyota executives face a congressional hearing on the safety issues next week. The conclusion of these hearings may include fines totaling into the millions. The National Highway Traffic Safety Administration also plans to start looking at the on-board electronics systems in many of the hybrid Toyota's. They seem to believe there may be a possibility that engine operation could be disrupted by electromagnetic interference that may be caused by power lines or other electromagnetic sources.

This comes after Japanese officials have ordered an investigation into the reports that there is a potential problem with the 2010 Prius braking system. They have received 14 complaints that brakes on the Prius “have momentarily stopped working when driving at low speeds, especially on slippery surfaces.”

The big problem here is that this is the technology that Toyota has for braking systems on the Prius is a “regenerative” braking system. Designed to capture and store energy produced as the vehicle slows down allowing the vehicle to recharge the batteries and boosting the overall fuel economy of the Prius. Most of the Toyota hybrid line has this technology at its design core.

Toyota took the unprecedented step of ceasing the sale of many of the company's models last month due to the accelerator pedal issue. As a result, the company reported that sales were off by 9% for the month.




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