Toyota 'hid dangerous defect'

LOS ANGELES - Toyota "knowingly hid a dangerous defect" that caused its vehicles to accelerate unexpectedly, the United States Government said, for the first time accusing the world's largest carmaker of breaking the law.

The Transportation Secretary, Ray LaHood, proposed a record civil penalty of US$16.4 million ($23.2 million), the most the Government can impose.

The recommended fine escalates the confrontation between Toyota and LaHood, who initially praised the carmaker for its handling of recalls the company attributed to faulty accelerator pedals.

The fine was announced the week after Toyota reported that US sales rose 41 per cent last month with the help of no-interest loans and discount leases, signalling that the company may be recovering from recalls of more than eight million vehicles worldwide.

The Transportation Department's action showed that "safety matters and they're going to be tough as nails", said Joan Claybrook, a former head of the National Highway Traffic Safety Administration.

"That's very appropriate. They caught Toyota red-handed."

The Japanese carmaker waited at least four months before telling the agency that accelerator pedals might stick, LaHood said.

Companies have five business days to report safety defects.

"We now have proof that Toyota failed to live up to its legal obligations," he said.

"Worse yet, they knowingly hid a dangerous defect for months from US officials and did not take action to protect millions of drivers and their families."

Toyota said it had not received the highway safety administration's letter on the fine.

"We have already taken a number of important steps to improve our communications with regulators and customers on safety-related matters as part of our strengthened overall commitment to quality assurance," the company said, without saying if it will dispute the fine, which it has two weeks to contest or accept.

LaHood has increasingly faulted Toyota's response since January 28, when he said he had "no criticism" of the company and Toyota "did what they're supposed to do".

In January Toyota recalled about 2.3 million US cars and trucks for sticky accelerator pedals.

The penalty could "very possibly" be the first of multiple fines, said Claybrook, who is former president of Public Citizen, a Washington consumer advocacy group.

The highway safety administration cited documents obtained from Toyota in saying the company knew about the pedal defect since at least September 29, the day it told distributors in 31 European countries and Canada to make repairs to resolve sticky-pedal complaints.

"NHTSA wants to make it clear that it was Toyota that was at fault and the agency did its best within the system," said Alan Baum, a motor industry analyst at Baum & Associates in West Bloomfield, Michigan.

He said Toyota would probably not contest the fine "since they've essentially said they screwed up".

At a February congressional hearing, Toyota's US sales chief, Jim Lentz, told lawmakers "we failed to promptly analyse and respond to information emerging from Europe and in the United States" about the sticky pedals.

- BLOOMBERG