Toyota share price up, recalls 625 000 hybrid cars over software glitch

Toyota Motor Corp, the worlds biggest automaker, announced on Wednesday it will recall 625 000 hybrid vehicles globally to fix a software glitch that in rare cases could shut down the cars hybrid system.

The latest recall action comes after the Japanese car maker pulled back almost 2.9 million vehicles in late June to replace allegedly defective airbag inflators that could shatter a metal casing upon the airbags triggering and send shrapnel flying toward the passengers.

Wednesdays recall affects certain Prius v minivans, also known as Prius alpha and Prius+ in some markets, as well as some Auris hybrid vehicles, that were manufactured between May 2010 and November 2014.

Toyota said that the problem was linked to a software that controls a power converter, similar to an issue that last year led to the pullback of 1.9 million Prius cars. The issue stems from a current software setting for the motor/generator control ECU and hybrid control ECU which could result in higher thermal stress in certain transistors of the power converter, potentially damaging them.

“In limited instances, the hybrid system might shut down while the vehicle is being driven, resulting in the loss of power, bringing the vehicle to stop,” Toyota said.

The company added that 340 000 of the withdrawn vehicles were sold in Japan, 160 000 in Europe and 120 000 in North America, and that there have been no reports of incidents tied to the glitch.

Despite the massive recalls that have recently plagued the company, it said in May it expects to report a third consecutive record annual net profit in the current fiscal year.

Toyota Motor Corp rose 0.88% on Wednesday in Tokyo to JPY 8 273 per share, marking a year-on-year advance of 37.36%. The company is valued at JPY 28.03 trillion. According to the Financial Times, the 25 analysts offering 12-month price targets for Toyota Motor Corp have a median target of JPY 9 500, with a high estimate of JPY 10 500 and a low estimate of JPY 7 800. The median estimate represents a 14.83% increase from the last price of JPY 8 273.