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Toyota to pay extra fines over recalls

Washington - Toyota has agreed to pay $32.4m in fines over its handling of two auto recalls, bringing total penalties levied on the firm to $48.8m this year, officials said Monday.

The assessments were related to the timeliness of Toyota recalls issued in 2005 over potential concerns with steering relay rods, and others from 2007 to early 2010 to address the possibility of pedals getting trappd by floor mats.

They come on top of Toyota's record $16.4m fine assessed in April to settle claims the automaker hid accelerator pedal defects blamed for dozens of deaths.

The company said it would pay the fines without admitting any violation of its obligations under the US Safety Act.

"Toyota is pleased to have resolved these legacy issues related to the timeliness of prior recalls dating back to 2005," said Steve St Angelo, Toyota's chief quality officer for North America.

"These agreements are an opportunity to turn the page to an even more constructive relationship with NHTSA (National Highway Traffic Safety Administration) and focus even more on listening to our customers and meeting their high expectations for safe and reliable vehicles."

Toyota issued a series of mass recalls of around 10 million vehicles worldwide in late 2009 and early 2010 that undermined the company's once stellar reputation and triggered US congressional investigations.

"Safety is our top priority and we take our responsibility to protect consumers seriously... I am pleased that Toyota agreed to pay the maximum possible penalty and I expect Toyota to work cooperatively in the future to ensure consumers' safety." Transportation Secretary Ray LaHood said in a statement.

Out of the total new penalties, a $16.375m fine was tied to an investigation completed Monday over Toyota's recall of nearly five million vehicles with accelerator pedals that can become entrapped by floor mats, the Department of Transportation said.

It said the company had failed to report a known safety defect within five days, as required by law.

Another $16.05m fine stems from an NHTSA probe into whether the automaker properly notified the agency of a safety defect in several Toyota models in 2004 and 2005 that could result in the loss of steering control.

The defect led to a 2004 recall in Japan for Hilux trucks that Toyota initially said did not extend to US models. In 2005, Toyota informed NHTSA that the steering relay rod defect was present in several models sold in the United States and conducted a recall for nearly one million vehicles.

NHTSA said it learned in May of complaints from US consumers and others that Toyota had not disclosed additional information.

"Automakers are required to report any safety defects to NHTSA swiftly, and we expect them to do so," said NHTSA Administrator David Strickland.

Both fines levied against Toyota are the maximum in civil penalties for each of the two violations stemming from the pedal entrapment and steering relay rod recalls.

In 2008, Toyota ended the 77-year reign of General Motors as the world's largest automaker but the road has been a bumpy one for the Japanese giant, facing the impact of the economic crisis, recalls and recently a strong yen.

Sales are falling in the United States, with the automaker slipping from second to third place this year behind reviving giants Ford and market leader GM.

Toyota reported a 7.3% sales drop in November and its market share could fall by 17% to just over 15% in 2010, according to IHS Automotive.

To stem the bleeding, the automaker has added an extra four weeks to new vehicle testing, sped up its decision-making process and appointed regional quality control officers.

Analysts say Toyota has become more aggressive in catching possible defects as part of a campaign to improve its consumer image, but warn that continued frequent recalls damage its branding as a quality carmaker.

Only a week ago, Toyota recalled some 94 000 of its 2011 Sienna minivans in the United States to replace a brake bracket that could get stuck.

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