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Japanese automaker Toyota has been hit by an unfavorable “double whammy”, and the company is suffering both at the stock market and on the sales floor. Last month, the world’s largest automaker issued a recall for more than four and half million cars from eight different models due to a problem with the gas pedal sticking at inopportune times. Now the companis facing allegations that the brakes on the popular Prius hybrid are prone to failure.

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To date, the company has not issued a recall on the gas-electric Prius line, although more than one hundred owners have reported brake failures. Failed brakes have been listed as the probably cause in at least two accidents. Anecdotal evidence suggests that the problem may be an electronic one, rather than a mechanical problem, as is the case with the gas pedal issue.

While the company has suspended sales of the eight models that have been affected by the brake problem, the Prius is still being sold at retail and no formal recall has been issued. Sales have dropped to almost nothing at Toyota showrooms, partly due to consumer caution and partly due to the fact that the company currently has very few vehicles to sell. This has caused quite a setback for the 70 year old Japanese company that has until recently enjoyed a reputation as one of the world’s most reliable automakers.

Toyota stock has fallen recently as investors worry about the cost of repairing millions of vehicles as well as the cost of open dealerships not selling any cars.

The company has indicated that they are looking into the matter regarding the Prius brakes. It will be interesting to see if U.S. customers will continue to buy the Prius, a vehicle that has been extraordinarily popular since it was introduced worldwide in 2001. In 2008, when gas prices were routinely above $4 in the United States, the waiting list for a new Prius was months long. Used models were actually selling for more money than new ones as buyers grabbed them as quickly as their owners put them up for sale.

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Is the Prius safe to drive? Until the company formally issues a recall or until the U.S. government forces Toyota to take action, there is no reason to regard the cars as unsafe. If you’re in the market for a hybrid vehicle, the Prius is still a very efficient car to buy.

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Source by Charles Essmeier