Car Hire Companies are Hit Hard by the Toyota Recall Debacle

Feb. 16, 2010 - PRLog -- Toyota is the largest manufacturer of automobiles in the world and their recall of 8 million cars is the biggest such event that has every happened. Almost 200,000 cars are being recalled in the UK alone, due to faulty accelerators, failing breaks and steering problems. Decode Car Hire Limited http://www.decodecarhire.co.uk , one of the UK’s leading internet rental car reservation websites, had to cancel some orders made by customers that booked one of the defective vehicles.

The UK managing director for Toyota, Miguel Fonseca, was optimistic and sympathetic in his statements and set a goal for completing the recall in 8 weeks or less. Fonseca also said, “We are committed to accomplishing this safety recall as quickly as possible.” The work does not stop there however. After all of the defective models are recalled from the rental car companies and from the consumers, they will need to be fixed. Toyota service garages are working overtime to complete the repair work fast. What is unknown is how well the cars will perform after they are revamped.    

The Toyota company has reported the total cost of the needed repairs will be almost 1 billion pounds and that will go along with the projected 700 million pounds of lost sales for the first quarter of 2010. The setbacks will more than offset the 1.1 billion pounds of profit the company reported in the final quarter of 2009. The problems will intensify after the car hire companies remove all of the inadequate vehicles from their fleets. The Avis-Budget group reported they will pull over 20,000 cars off the road. The Hertz company, which is even bigger than Avis-Budget is projected to remove around 25,000 cars in the coming weeks.

In the United States, the National Highway Traffic Safety Administration publicized they will commence an investigation that focuses on the new Prius models. Because the Prius is the most popular hybrid car in the United States, the authorities are going to closely scrutinize and monitor the current and repaired automobiles. There have already been 21 deaths attributed to the defects in the United States alone since January 27, 2010.      

In the UK, nearly 40,000 Prius models were recently sold, but none of the owners filed formal complaints about braking malfunctions. But there are still 200,000 other cars that will need to be recalled. For owners of the recalled cars, they will be compensated, but the car hire customers will feel a trickledown effect in the price of rental cars this year. Actually, it will be more like a waterfall effect.
 
If so many of these new models need to be removed from the car hire company fleets, there will be a shortage of cars this year. It might even carry into 2011. Car hire consumers travelling to the United States, and southern Europe will feel the effects the greatest. In a year of an already short supplied car hire industry, this disaster could not have come at a worse time. Be ready to pay higher prices for car hire all over the world this year, but especially in those tourist hot spots.

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Decode Car Hire LTD is a worldwide car hire brokerage company based in England, UK. Decode Car Hire LTD has been in business for more than one year and aims to provide the lowest price for the world’s most popular tourist destinations.