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US to fine Toyota USD16m for hiding defects

The US government has accused Toyota of hiding a "dangerous defect" and proposed a record USD16.4 million fine for failing to quickly alert regulators to safety problems in gas pedals on popular models such as the Camry and Corolla.

The proposed fine, announced on 5 April by US’s transportation secretary Ray LaHood, is the most the Government could levy for the sticky gas pedals that have led Toyota Motor Corp. to recall millions of vehicles. There could be further penalties under continuing federal probes. The automaker also faces private lawsuits which could end up costing them many millions more.

Toyota faces a dilemma over how to respond to the fine. The company has 138 potential class-action lawsuits against it over falling vehicle values and nearly 100 personal injury and wrongful death cases in federal courts nationwide. If Toyota pays the fine, the admission could hurt it in courtrooms. But battling the US government over the penalties could undermine the automaker’s attempts to move on from the recalls.