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Toyota to pay record fine for recall delay

Toyota has agreed to pay $17.35 million - a record amount - for failing to report a safety defect to the U.S. government in a timely manner.

The fine comes from a recall announced by Toyota in June of 154,036 2010 Lexus RX 350 and RX 450h vehicles to address a risk that a loose floormat could force down the accelerator pedal.

The U.S. Department of Transportation said the fine was the highest ever for not initiating a recall in a timely manner.

Toyota said in a statement it had agreed to the settlement without admitting any violation of its U.S. safety obligations.

"We agreed to this settlement in order to avoid a time-consuming dispute and to focus fully on our shared commitment with NHTSA to keep drivers safe," Ray Tanguay, chief quality officer of Toyota North America, said.

The Department of Transport's National Highway Traffic Safety Administration (NHTSA) said it contacted Toyota in May after it noticed a trend of "floor mat pedal entrapments" in vehicle owner questionnaires.

Toyota advised the safety agency a month later that it was aware of 63 alleged incidents and said it would launch the recall.

Federal law requires automakers to notify the agency within five business days of determining that a safety defect exists and to conduct a recall.

"Every moment of delay has the potential to lead to deaths or injuries on our nation's highways," said David Strickland, the Administrator of the highway safety agency.

This year's recall followed a string of damaging safety recalls from Toyota, the world's top automaker, since 2009.

Certain unintended acceleration claims made against some models caused a worldwide recall of nearly 19 million vehicles from late 2009 to early 2011.

In 2010, Toyota was fined a total of $48.8 million in civil penalties as a result of three separate investigations into its handling of vehicle recalls.

Analysts said Tuesday's NHTSA fine would not have any significant impact on demand.

"Consumers tend to gloss over these events. A lot of the decision-making is based on products in the showroom, and in that respect, Toyota is very competitive," Polk analyst Tom Libby said.

Matthew Stover, an analyst with Guggenheim Securities, said there would be minimal financial impact from the penalties.

"Recalls in general don't have an impact on sales like they used to," Stover said.

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