Market Playground

By Brian “Newman” Rayl

On Tuesday, August 10th, 2010, government investigators said that they have evaluated the Toyota (NYSE:TM) electronics systems and have yet to find any flaws that have caused several cars to accelerate out of control. According to the report, the only causes of “unintended acceleration” that has been identified so far are floor mats getting caught under the accelerators and “sticky gas pedals.” The investigators stressed that they are “continuing to study whether there are potential electronic or software defects in these vehicles.”

These acceleration issues have been linked to 89 deaths, according to a government report back in May 2010. The National Highway Traffic Safety Administration (NHTSA) has been testing a number of vehicles that were involved in these incidents utilizing a black box technology similar to that in airplanes. According to the data, out of 58 vehicles that were tested for these acceleration issues, the government report states that 35 of these “never hit the brakes” and another 14 only showed “partial braking.”

Toyota released a statement in response to the report:

“Having conducted more than 4,000 on-site vehicle inspections, in no case have we found electronic throttle controls to be a cause of unintended acceleration. “

– Toyota Motor Company

In the past year, Toyota has recalled nearly 8 million vehicles to fix potential problems and continues to work on fixing their reputation and image after several highly publicized incidents. Since the incidents were first reported, Toyota has been quickly losing market share to competitors like Ford (NYSE: F), General Motors, Chrysler, and Nissan (OTC: NSANY). In the most recent Edmunds AutoObserver report, Toyota July auto sales were down 3% from July 2009, though they were up 20% from June 2010 amidst increases by nearly every other auto maker.

Disclosure: Long F

Contact the Author: newman@marketplayground.com