Defective Fuel Pump Settlement Will Cost Toyota $180 Million

Denso, the manufacturer of the low-pressure fuel pumps at the root of the case, was also named in the lawsuit. The settlement is preliminary at this point and only requires a judge's autograph.

Once the settlement is signed, Toyota and Denso will start paying their customers, though part of the agreement is that neither company admits to wrongdoing. This kind of settlement is not unusual. Earlier this year, BMW settled on a case related to sales inflationwithout having to admit guilt.

"We are pleased to have resolved this litigation in a way that demonstrates our commitment to providing customers with a great ownership experience," Toyota stated.

The plaintiff's attorney, Dee Miles, agreed they would receive a "full remedy." "The value of the settlement is still being analyzed by experts, but based on the initial analysis, we fully expect that settlement value to exceed $150 million," said Miles.

Under the terms of the settlement, Toyota will extend the warranty for the new pumps to 15 years or 150,000 miles, which is a lot more than the standard three-year/36,000-mile basic warranty every new Toyota product is sold with. Toyota will also provide loaner vehicles and tow the car to a dealer if required.

In cases where the repairs have already been made, Toyota will reimburse the customer. Customers will also be refunded if they paid for a loaner or rental vehicles and towing services.

It's believed that the various law firms representing the plaintiffs will seek legal fees, which in this case is roughly $28.5 million.

While $180 million is a lot of cash to hand over, it's small fry compared to thelegal battles Toyota is facing in Australia. Toyota was recently found guilty of selling 264,000 Fortuner, Prado, and Hilux vehicles with faulty diesel particulate filters between October 2015 and April 2020. As a result, these vehicles lost value, spewed harmful emissions, were less fuel efficient, and suffered premature wear and tear.

如果每一个客户的这些车辆a claim, the bill could easily exceed $1.5 billion.