In the recent shadow of Toyota’s unintended acceleration, Toyota has offered price and loan incentives to get customers back in the doors and buying automobiles. Honda, in an attempt to not fall behind, is offering its biggest deals ever, starting a price war which could leave other automobile manufacturers behind. The irony of this price war is that it is being started by Japanese automakers which historically don’t use these types of tactics. American automakers have been cautious about entering the price wars since they do not have a lot of cash to offer incentives.” said Aaron Bragman, auto industry analyst at IHS Global Insight.

These incentives may end up hurting Toyota in the near future. The company has seen sales soar as bargain hunters and loyal customers stream into showrooms to take advantage of the deals. Once that traffic runs out, Toyota will find it even harder to sell to people who are not loyal or who are skeptical of the brand.

In Mumbai, India, Satish Sawant, a software engineer, was driving him and his family home from the car dealership in his band new Nano automobile. Shortly after leaving the dealership they began to smell smoke coming from the engine compartment in the back of the car. Satish and his family safely exited the car as it became engulfed in flames.

This is not the first time there have been complaints about the Nano. Last fall there were three Nano’s where customers complained about their car starting to smoke. Tata Motors attributed the problem to a faulty electrical switch and said it had changed suppliers and done additional tests to rule out a recall or redesign. A Tata Motors spokesman assured that the incidents are not related.

Tata Motors, which also owns Jaguar and Land Rover, have bragged about their Nano vehicle as one of the world’s cheapest cars. The company hoped it would be part of a safety revolution as it would get people off of dangerous motorbikes and into an affordable car.

Tata Motors plans to start selling versions of the Nano in Europe in 2011 followed by an introduction into America. Some say the Nano’s smoke and fire problems are a result of the poor quality control issues at India’s number three car maker, which must be addressed before Tata can successfully take its brand global.

If you have taken your Toyota in for repairs under their January recall for unintended acceleration and you are still unhappy with its operation, Toyota is offering another fix. The Japanese automaker said in a memo obtained Tuesday by The Associated Press that if a customer is unhappy with the feel of the accelerator after the car is repaired, dealers can provide a replacement pedal at no charge. “A replacement pedal should only be offered to a customer after the reinforcement bar has been installed and the customer has expressed dissatisfaction with the operation and/or feel of the pedal,” Toyota said in a memo to dealers, service manager and parts managers.

Over 100 owners have complained about problems with sudden acceleration after Toyota dealers fixed their vehicles. Toyota has said it is confident in its repairs and has found no evidence of other problems. Many feel the problem with the vehicle is not a problem with the accelerator parts but rather with electronic interference. A group of consumer advocates and engineers who contend Toyota has discounted potential electronic problems in problem vehicles planned to hold a news conference Tuesday on the massive recalls.

Kristen Tabar, an electronics general manager with Toyota’s technical center in Ann Arbor, Mich., said in a video clip posted by the company on Monday that the automaker has eight labs in Japan that it uses to bombard vehicles with electronic interference. She said Toyota ensures that “every system in the vehicle operates properly under those conditions.”

Below is a list of Toyota Vehicles recalled:

  • 2005-2010 Avalon
  • 2007-2010 Camry
  • 2009-2010 Corolla
  • 2008-2010 Highlander
  • 2009-2010 Matrix
  • 2004-2009 Prius
  • 2010 Prius
  • 2009-2010 RAV4
  • 2008-2010 Sequoia
  • 2005-2010 Tacoma
  • 2007-2010 Tundra
  • 2009-2010 VENZA

It was good news for General Motors dealerships when earlier this month GM announced it would keep over 600 dealerships open. Despite a congressional deadline of July 15, many dealerships targeted for closure are still not sure which dealerships will be closed and which will be saved. According to attorneys and auto industry executives, some dealerships are in negotiations while others have heard no news at all.

Details are limited due to a confidentiality agreement between GM and the dealers. Dealers don’t want customers to know they might close chasing away potential buyers of vehicles still on the lot. GM has also declined to identify dealers, saying it is up to the dealers to disclose whether they were being reinstated or not.

In February 2009 over one hundred complaints had been made to The National Highway Traffic Safety Administration (NHTSA) Office in regards to 2010 Prius brakes that do not always function correctly. An internal NHTSA agency memo indicated that the issue was a “short delay” in regenerative braking when hitting a bump. Japan’s Ministry of Transportation ordered Toyota to investigate Prius braking problems after it received 14 complaints, and Toyota received 77 complaints in Japan. On February 9, 2010 Toyota announced a voluntary global recall of third generation 2010 Prius models. A total of 133,000 Prius vehicles in the U.S. and 52,000 in Europe received software updates to fix the problem.

NHTSA has received at least 10 reports of unintended acceleration on Prius models that Toyota claims to have already been fixed under its recall. The Associated Press reported on March 5, 2010 that additional complaints may be a psychological response of “mass hysteria” to “relentless media coverage” of the Toyota recalls.

Below are two accounts of runaway Prius’s that Toyota concluded the problem was driver related as they could not find anything wrong with the car.

On March 8,2010 the California Highway Patrol (CHP) received a 911 call from a man speeding down a California highway at 90 mph in his 2008 Toyota Prius. James Sikes, the driver of the vehicle claimed that his gas pedal was stuck and pressing the brakes would not slow down the car. The highway patrol officer at the scene says he could see the brake lights turn on and off periodically, and he could smell the heated brakes from a quarter mile away.

When the officer told Sikes to shift to neutral Sikes refused, later telling reporters he feared shifting to neutral would cause him to loose control of the car. Eventually, the car stopped on its own by applying the foot brake and parking brake at the same time.

Toyota’s investigators examined the car and found that the accelerator pedal was functioning normally with no mechanical binding or friction. However, the front brakes showed severe wear and damage from overheating. One of the most surprising Toyota findings was evidence of numerous, rapidly repeated on-and-off applications of both the accelerator and brake pedals. Sikes insisted he was pressing hard on the brakes to stop the car, so repeated application of the gas pedal does not seem to make sense, says Toyota. Toyota’s engineers also purposely overheated the brakes, but could still stop the vehicle.

On March 9, 2010 a similar story in New York involved a housekeeper who said that the 2005 Toyota Prius she was driving sped up on its own down a driveway and crashed into a stone wall. The driver of the car was not seriously hurt, but the car was totaled.

The NHTSA said the computer data from a Toyota Prius showed that at the time of the accident the throttle was open and the driver was not applying the brakes.

General Motors R&D, Carnegie Mellon University and The University of Southern California are working together to develop a heads up display for automobiles. Working similar to the heads up displays for aircraft, the technology will make driving at night and in bad weather safer.

The vehicle will be armed with infrared cameras that identify where the edge of the road is and lasers will be used to paint the edge of the road onto the windshield so the driver can see it. When driving in weather with reduced visibility the enhanced vision system combines night vision with the head-up system to identify and highlight the precise location of people, animals, and even road signs along the side of the road that they may not be seen by the driver

Enhanced vision systems are a 21st Century take on Head up display technology that GM was the first to market in 1988. They were designed to help keep driver attention on the road by displaying important information such as vehicle speed, lane change indicator status and vehicle warning messages directly into the driver’s field of vision. Heads up display systems are currently available on the GMC Acadia, Chevrolet Corvette, Buick LaCrosse and Cadillac STS.

Some final documentation, financing and government approvals are the only thing holding back Fords sale of Volvo to major automaker Geely Holding Group, which would make Volvo the first major automaker to become Chinese owned. Ford expects the formal signing of the sales documents will take place in the first quarter of 2010 with the deal being closed in the second quarter.

Ford will continue to work with Volvo Cars “in several areas” after the sale but will have no financial interest in Volvo. The sale would ensure Volvo has the resources and capital necessary to strengthen the business and build its global franchise. Ford will focus on and implement its core ONE Ford strategy meaning they will return to the traditional Ford, Lincoln and Mercury brands.

According to Toyota’s company earnings results, it is estimated that Toyota’s unintended acceleration will affect almost 8.5 million cars world wide and could end up costing the company almost $2 billion. Analysts say that this is a conservative estimate and that the cost will more likely be almost $6 billion, if you include repairs for recalls, lost sales and the ever growing lawsuits being filed against the company.

Still, amongst all the bad publicity, Toyota has done a good job cutting costs over the past year, and it is still a leader in environmental technologies. Most analysts predict good profit growth next year as demand grows in markets like China.

“Toyota has announced plans to deal with the recalls, and is working to address the problems promptly,” said Noriyuki Matsushima, an auto analyst at Citigroup Global Markets Japan. “We think the recall story is likely to die down by April if its quality dealerships can quickly repair the problems while providing reassurance to customers.”

For now, Toyota’s incentives appear to be working. Dealers are reporting surging sales and expect to post a net profit of $885 million in the fiscal year ending March 31, coming back from a loss last year.