Toyota (NYSE:TM), the world's leading automaker, has announced a voluntary recall for 1.85 million RAV 4 SUVs (2013-2018 models) due to potential fire risks. The issue stems from small-top replacement 12-volt batteries that are incorrectly sized and could move during forceful turns if not properly secured by the hold-down clamp. This could potentially lead to a short circuit and subsequent fire.
The company's filings with the National Highway Traffic Safety Administration, which would confirm any related fires or accidents due to this issue, were not immediately available. Toyota plans to alert affected owners by late December and provide free replacements of the hold-down clamp, battery tray, and positive terminal cover at dealerships.
This recall comes on the heels of another one issued a week earlier involving 814,000 Highlander SUVs with a front bumper detachment issue. Owners can check their vehicles' recall status on the highway traffic agency’s or Toyota’s recall websites using their vehicle identification numbers.
The back-to-back recalls underscore the rigorous standards Toyota is implementing to ensure customer safety. The company is taking proactive measures to rectify any issues that may pose potential risks to its customers, reinforcing its commitment to quality and safety.
InvestingPro Insights
Despite the recent recalls, Toyota, a prominent player in the Automobiles industry, has shown impressive financial performance. According to InvestingPro's real-time data, the company has a market cap of 251.57 billion USD and a P/E ratio of 12.59, indicating that it is trading at a low P/E ratio relative to near-term earnings growth. Furthermore, Toyota's revenue growth has been accelerating, with a 22.78% increase in the last twelve months as of Q1 2024.
InvestingPro Tips also highlight that Toyota has maintained dividend payments for 44 consecutive years, which is a testament to its financial stability. The company's stock is trading near its 52-week high, reflecting investor confidence. However, potential investors should also consider that the company's total debt has increased for consecutive years.
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