20 Mar 2014

Toyota to pay record $1.2b fine

4:49 pm on 20 March 2014

Japanese car maker Toyota has agreed to pay $US1.2 billion to resolve a criminal dispute with the United States over safety problems that led to the recall of millions of vehicles.

A Toyota car sales yard in California.

Photo: AFP

Between 2009 and 2011 Toyota recalled more than 10 million vehicles because of issues with brakes, accelerator pedals and floormats.

According to the Department of Justice the company initially concealed the magnitude of the problem, making misleading public statements and giving inaccurate facts to members of Congress.

Attorney General Eric Holder said Toyota's behaviour was shameful and the company had "intentionally concealed information" about the problems.

The BBC reports it is the largest criminal penalty yet imposed on a carmaker in the US.

Mr Holder told a news conference in Washington: "Rather than promptly disclosing and correcting safety issues about which they were aware, Toyota made misleading public statements to consumers and gave inaccurate facts to members of Congress.

"And they concealed from federal regulators the extent of problems that some consumers encountered with sticking gas pedals and unsecured or incompatible floor mats that could cause these unintended acceleration episodes."

The problems dented Toyota's reputation for reliability and hurt its sales in the US, one of its biggest markets.

Toyota said it had changed the way it handled such issues and had been working towards rebuilding its relationship with customers.

"At the time of these recalls, we took full responsibility for any concerns our actions may have caused customers and we rededicated ourselves to earning their trust," said Christopher Reynolds, chief legal officer Toyota Motor North America, in a statement.