January 27, 2010
In its rush last week to play corporate white knight and recall a bunch of brand-spanking-new Toyotas for sticky accelerator pedals, Toyota forgot one eensy detail: the recall regulations prohibit the sale of defective new vehicles and components.
Last Thursday, Toyota tried to seize the high road, announcing that it was recalling 2.3 million vehicles, encompassing eight models mostly in the 2009 and 2010 model years, for accelerator pedals that might not release when the driver eased off the gas. Some of the recall population involved vehicles not yet sold. The automaker claimed that the problem was a wear issue, and was planning to sell the defective vehicles, as is, with the proviso that new owners who noticed the problem could bring the vehicle to the dealer for the remedy.
This was pointed out, with some disbelief, by several news articles on the recall. What they didn’t mention was Part 573.11: Prohibition on sale or lease of new defective and noncompliant motor vehicles and items of replacement equipment. This section expressly forbids selling a new defective vehicle or component until it is remedied.
Four days later, the fanfare was cut short by yesterday’s announcement that Toyota would stop selling these vehicles until the new pedal assemblies were installed.
So, what we want to know: who called the decision-makers at Toyota? The lawyers at the Department of Transportation? A savvy dealer? An educated underling?
Here’s the relevant section:
§ 573.11 Prohibition on sale or lease of new defective and noncompliant motor vehicles and items of replacement equipment.
(a) If notification is required by an order under 49 U.S.C. 30118(b) or is required under 49 U.S.C. 30118(c) and the manufacturer has provided to a dealer (including retailers of motor vehicle equipment) notification about a new motor vehicle or new item of replacement equipment in the dealer’s possession, including actual and constructive possession, at the time of notification that contains a defect related to motor vehicle safety or does not comply with an applicable motor vehicle safety standard issued under 49 CFR part 571, the dealer may sell or lease the motor vehicle or item of replacement equipment only if:
(1) The defect or noncompliance is remedied as required by 49 U.S.C. 30120 before delivery under the sale or lease; or
(2) When the notification is required by an order under 49 U.S.C. 30118(b), enforcement of the order is restrained or the order is set aside in a civil action to which 49 U.S.C. 30121(d) applies.
(b) Paragraph (a) of this section does not prohibit a dealer from offering the vehicle or equipment for sale or lease, provided that the dealer does not sell or lease it.