TEXT OF INTERVIEW
Bill Radke: Toyota has halted sales of a Lexus SUV. This time, it’s not about sudden acceleration — it’s a rollover issue. Marketplace’s Jeremy Hobson joins us now ;ove from New York. Good morning, Jeremy.
Jeremy Hobson: Good morning, Bill.
Radke: We’re talking about the Lexus GX 460. What is the issue?
Hobson: Well the magazine Consumer Reports does its own testing of vehicles, and they found in their testing that when the driver is making a sharp turn at a high speed and then takes his foot off the gas, the back of the vehicle slides toward the outside of that turn, and they say that could lead to a rollover. So they slapped a “do not buy” warning on it — something Consumer Reports has only done once in the last decade. Now Toyota, taking this very seriously, is stopping sales of this vehicle, and they’re going to try to reproduce these results in their own testing before making any other moves.
Radke: I would like to know how many times I’ve asked this in the last several months, but can things get any worse for Toyota?
Hobson: I don’t know how many times you’ve asked that, but I did talk to one guy this morning who says yes, it could get worse for Toyota. Paul Newton is an auto industry analyst at IHS Global Insight, and he says first of all, this has to be put into context. The idea that SUVs rollover with sudden movements at high speeds is not new, he says. But he says this is a Lexus SUV we’re talking about, not a Toyota RAV4.
Paul Newton: When you’re a big player in the prestige market, this kind of thing will impact you more than it does in the mass market.
But having said that Bill, Newton says Toyota does seem to be weathering this storm pretty well in terms of sales, thanks to some very aggressive incentives from dealers.
Radke: Yes. Marketplace’s Jeremy Hobson in New York. Thanks Jeremy.
Hobson: Thanks, Bill.
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