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AUTO INDUSTRY REPORTER

Senior Japanese auto industry executives are watching the frenzy surrounding the recall of millions of Toyota Motor Corp. vehicles closely amid fears it could escalate into a political battle between the United States and Japan.

"I hope it's not going to be a U.S. versus Japan kind of political issue," Takashi Yamanouchi, chief executive officer of Mazda Motor Corp., said in an interview yesterday at the Canadian International Auto Show in Toronto.

There is heavy criticism of Toyota in the United States, said Mr. Yamanouchi, who noted that "cars are still machines, so because they still are machines they cannot be 100 per cent perfect." Mazda is Japan's fifth-largest auto maker. Toyota is the largest.

Osamu Masuko, president of Mitsubishi Motors Corp., who was also at the Toronto show yesterday, said he hopes other Japanese brands will not be damaged by the fallout from the recalls, which now include Toyota's most popular vehicles in North America and were expanded this week to include a global recall of more than 400,000 Prius models.

Mitsubishi Motors, now the eighth-largest Japanese manufacturer, came back from an even larger scandal in Japan, during which some executives were arrested and charged with covering up defects.

"We did overcome the problem," said Mr. Masuko, who served as chief business ethics officer for the company from 2005 to 2007. "We moved beyond that and here we are today. I do hope that Toyota will follow a similar flow."

The massive flood of publicity about Toyota has caused concerns among drivers of other vehicles.

"We've had a couple of calls," said Steve Kelleher, president of Hyundai Auto Canada Corp., whose company reassured those customers that its quality rankings now rank among the highest in the industry.

"The consumers have seen this day in and day out and it's a natural progression. People think Toyota, the company that's always been touted as the top company in quality, has these issues [so] are other people having these issues and is my car safe?"

Toyota has recalled more than eight million vehicles globally to deal with three separate problems and the firestorm of adverse publicity has damaged its sterling reputation for quality and reliability.

A problem with floor mats jamming accelerator pedals - mainly in U.S. vehicles - sparked the recall of Camry, Avalon and other cars in November.

The auto maker recalled about four million Corolla, Matrix, Camry and other models last month because of potentially sticky gas pedals that would prevent or delay deceleration.

The Prius recall was announced on Tuesday.

Akio Toyoda, the company's president, has apologized twice, announced a blue-ribbon quality committee to recommend improvements in the way Toyota makes its vehicles and plans to visit the United States.

U.S. politicians are calling for him to appear before Congressional committees to explain the company's actions.

Consumer website edmunds.com said yesterday that the crisis will hurt Toyota's sales in the U.S. market this year. Edmunds cut its estimate for Toyota's market share to 16.5 per cent in 2010 from a previous forecast of 17.6 per cent.