Post date: Dec 27, 2012 12:57:44 PM
Toyota reaches settlement worth more than a billion dollars in a case involving litigation over unintended acceleration in millions of its vehicles. Settlement must be approved by a California federal judge.
TOYOTA HANDOUT - Toyota Motor Corp has agreed to spend $1.1 billion to settle sweeping U.S. class-action litigation over claims that millions of its vehicles accelerate unintentionally, as the Japanese automaker seeks to move past the biggest safety crisis in its history.
Shares of Toyota rose nearly 3 percent in Tokyo following the news, with some investors saying the settlement removed one uncertainty for the company and looked manageable given its improving sales outlook and a weaker yen.The proposed settlement will compensate customers for economic losses related to possible safety defects in Toyota vehicles, covering most of the litigation involving unintended acceleration, although it does not cover claims for wrongful death or injuries.
About 16 million Toyota, Lexus and Scion vehicles sold in the United States spanning the model years 1998 to 2010 are covered by the action, according to court filings made public on Wednesday (December 26). Thirty nameplates are affected, including the top-selling Toyota Camry midsize sedan and Corolla compact car.
Toyota, the No. 3 automaker in the U.S. market, admitted no fault in proposing the settlement, one of the largest of U.S. class-action litigation in the automotive sector.
Toyota may be able to offset costs of this settlement with a rise in its profits as the yen weakens, analysts said. Toyota's operating profit increases by 35 billion yen for every one-yen rise in the value of the dollar. The automaker has forecast an operating profit of 1.05 trillion yen ($12.3 billion) for the financial year ending in March 2013.
Toyota shares rose 2.7 percent, compared with a 1 percent rise in Japan's benchmark Nikkei on Thursday (December 27).