NHTSA Slaps Toyota with $17.35-Million Fine for Defect Reporting

Think you're having a bad day? Toyota Motor Corporation was just slapped with the largest auto safety-related fine in history today--$17.35 million--after the National Highway Traffic Safety Administration found it had failed to follow regulations on reporting safety defects.

This is, unfortunately, not a new or unfamiliar occurrence for Toyota. 2010 was a particularly bad year for the Japanese-American carmaker: in the midst of fixing an "unintended acceleration" scandal that threatened to scuttle sales, Toyota was hit with three separate multi-million dollar fines ($16.375 million, $16.375 million, and $16 million). The $16.375 million fines were assessed after Toyota failed to notify NHTSA of possible accelerator pedal problems and floormat problems in a timely manner.

Fast forward two years and Toyota has scored been reprimanded for more reporting violations: Toyota's June 2012 recall of 2010 Lexus RX350 and 450h crossovers didn't follow government guidelines. Automotive News reports that NHTSA contacted Toyota in May urging the company to look into RX floormats; Toyota replied a month later saying it would start a recall campaign. Unfortunately for Toyota the reply was at least 20 days too late: Federal statutes state that automakers have five business days after finding a safety defect to contact NHTSA and start recall proceedings.

The response can hardly be described as a slap on the wrist: at $17.35 million, the NHTSA fine represents the largest fine possible under current federal law (the maximum increases next year to $35 million) and the largest fine NHTSA has ever assessed.

For its part, Toyota agreed to pay the fine but would not admit fault--the equivalent of pleading no-contest. A statement released by Toyota said the company would simply pay the fine "in order to avoid a time-consuming dispute," among other things.

This week's fine brings Toyota's three-year fine total to $66.1 million, or the cost of 1644 2013 Lexus RX350 SUVs at a base price of $40,205 with destination. Here's hoping the automaker--which today reiterated its commitment to customer safety and following federal regulations--has learned its lesson.

Source: Automotive News (subscription required)

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