In a bid to restore its reputation on quality, Toyota Motors has decided to withdraw their 1.7 million vehicles in different parts of the world. The company has withdrawn around 16 million of their vehicles from 2009 and the company officials are saying that they are doing it for restoring their reputation on quality.
But this time the investors are not getting convinced that the company is withdrawing the vehicles only because of technical problems. This was evident from the fact that after hearing the news, the shares of Toyota plunged downwards in the stock market.
Toyota is facing complaints from US regulators on acceleration problems which have caused lots of accidents and fatalities. Among the major auto makers, Toyota was the only car manufacturer who has seen their sales falling in the last year in the US market. The reason which Toyota has cited for this withdrawal is fixing of a faulty fuel pump. There was also trouble in fuel pressure sensor which is connected to an engine fuel delivery pipe. Meanwhile, shares of Toyota’s competitor Honda are gaining well in the commercial market and their stock price is also on the rise.
Toyota has reported a profit of $4.6 billion in the current year.