Yesterday, Toyota Motor Corp. (NYSE: TM) announced that it will launch a voluntary safety recall with the National Highway Traffic Safety Administration (NHTSA) that will impact roughly 96,000 Toyota and Scion vehicles sold in the U.S. thanks to possible brake problems.
The problem occurs in extremely cold temperatures in the 2009 and 2010 Toyota Corolla and Corolla Matrix, along with the 2008 and 2009 Scion xD vehicles, all of which come equipped with 1.8 liter engines. Toyota will notify vehicle owners from 19 affected states in early September 2009. Toyota dealers will install a newly designed intake air connector to correct the problem.
It's been a rough week for Toyota, as the automaker recalled nearly 690,000 cars in China thanks to faulty electrical window switches. This recall impacts Toyota's Camry, Corolla, Vios, and Yaris models. Rounding out the news is yesterday's revelation from the Nikkei business daily that Toyota will cut its global production capacity by 10%, or a million vehicles. This move was made in order to improve utilization at underused plants, which the company believes will help it return to operating profit in fiscal 2010.
Technically, shares of the Japanese automaker are doing well. Currently the stock is riding along support from its 10-day and 10-week moving averages, but it will face overhead resistance from its 50-month trendline. Watch for a bit of a pullback today, as shares were trading lower in after-hours action.
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