Supplier CTS, who produced the gas pedals now under recall from Toyota, tells Automotive News [sub] that it “built parts to the automaker’s specifications and says it has no knowledge that its parts were responsible for any accidents or injuries.” Sources at CTS tell AN that although they are working on a fix with Toyota and that new pedals have been tested and are shipping to Toyota plants, “this is their recall.” That would seem to contradict the facts of the case, as Denso, Toyota’s gas pedal supplier for Japanese-built models, has not been involved in the recall. According to Inside Line, the issue with pedal return damping that has plagued CTS-supplied, US-built Toyotas has not turned up in Denso-produced gas pedals.
Separately, AN [sub] reports that blueprints for the redesigned pedal were finalized earlier this week, and are now being shipped to Toyota plants. This will help Toyota restart production quickly at its CTS-supplied plants in Indiana, Texas, Kentucky and Canada. But due to the size of the Toyota recall, retrofitting already-produced models will be expensive and time consuming. The two million+ pedals Toyota needs to replace recalled units account for more than CTS’s annual pedal production, meaning dealers could be stuck with unsaleable models for an extended period.
Accordingly, analysts tell AN [sub] that publicly-traded dealer groups could lose up to $1.5m gross profit per week because of the recall. Matt Nemer of Wells Fargo Securities says groups like AutoNation, Penske and Group1 could see per-share losses of 2 cents per week, putting downward pressure on their stock prices. Already Group1, which is one of the most import-dependent of the bunch, has seen its stock slide over 6 percent.