Tuesday, February 2, 2010

Manheim Pulls Toyotas From Auctions, Fix Found for Toyota, Honda Recalls Fits

Toyota is facing more fallout on its recent pedal issues with significant ramifications for car haulers. Two congressional committees have started hearings on the issue and, more importantly, the National Auto Auction Association has suggested that the affected cars not be sold at auction; the largest car auctioneer, Manheim, has pulled all affected Toyotas from its auctions.

That’s going to mean a drop in auction business and a drop in car transportation until Toyota does fix the problem. The news of today has the potential fix being a metal shim inserted into the friction level so that it does stay stuck. It seems to be an inelegant solution for a company that taught the US car industry how to do quality control, but any solution will be an improvement.

In the meantime, the liquidity of a Toyota dealer’s used car inventory is next to nil, as the option of selling a car at auction if it isn’t moving in the used car lot has been taken away. That might prove problematic for some dealers with a lot of Toyotas on hand and might be the final straw for a few car dealers.

Right in the middle of the critical pile-on over Toyota, Honda has announced that they are recalling 646,000 Fits, who proved to not quite live up to their name; their power window switch controls could allow water in and catch fire, which has happened at least three times. If you’re going to have a recall, this is the time to do it, as Honda won’t face near the bad press in the auto news universe.