Toyota recall action seen torpedoing sales

The recall of around 216,000 Toyota cars in Germany will cost the company around €13 million and is expected to reduce new sales in the country by around 20 percent.

Toyota recall action seen torpedoing sales
Photo: DPA

Problems with the accelerator in a number of Toyota models has led to enormous recalls for the company around the world, yet in Germany sales teams are still optimistic.

Alain Uyttenhoven, German head of the Japanese car maker told the Wirtschaftswoche magazine, “With around 400 sales, last weekend was the best for us since the end of the auto scrapping premium scheme.”

He said the repairs needed to ensure safety would cost around €30 per car, a cost which would be at least met by the marketing budget to make sure all are returned.

Most of the relevant cars in Germany should be repaired by the end of April he said.

He added, “And of course we are damaged by the negative headlines. Without them we would be selling an estimated 20 percent more.”

The safety authorities in Rhineland had been tasked by the federal government to test the eight Toyota models affected.

They say that all eight can be stopped while at full speed, meaning that the recall will be voluntary rather than compulsory, said Uyttenhoven.

This means that the recall is for repair of potential problems in the German cars does not have to be reported to the authorities and that traffic safety is not considered to be compromised by the Toyotas on the roads.

The Toyota Germany website says all 215,796 German owners of affected cars are being contacted personally and given the opportunity to bring their cars to workshops for the accelerator pedals to be replaced.

It says that condensation has been finding its way into the pedal structure, slowing down its return action from being pressed, to no longer having an affect.

This has led to some cars not slowing down even when the driver takes their foot off the accelerator, and in some cases the pedal remaining depressed and the car not stopping.

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German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.