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Toyota Woes Give Pause to Consumer Reports

Stocks in this article: TM

WASHINGTON ( TheStreet) -- When Consumer Reports began wrapping up its 2010 auto issue just as the Toyota (TM) recalls were accelerating, by its own ratings standards, its timing couldn't have been "worse."

The 74-year-old publication suspended recommendations of the recalled and sale-suspended Highlander and RAV4 models, dropped them from contention in its SUV categories, and added a recall plan-of-action article to the issue. Still, the Toyota recalls left their mark.

Critics wondered why Consumer Reports' testing hadn't caught the defects. After it named the recalled 2010 Prius the top "green" car, Consumer Reports was chided for perceived favoritism toward Toyota and other Japanese brands. Readers left comments on its Web site, asking why the publication's survey data is limited to its subscribers. While those surveys reach more than 7 million subscribers, putting the scope of Consumer Reports' more than 100-point survey second to the U.S. Census, their 1.4 million responses speak for the 135 million cars on U.S. roads.

The Consumers Union, Consumer Reports' nonprofit parent organization, said the flaws were rare enough to avoid detection and that it lacks the resources to expand its survey. It vowed to increase the safety information available on Consumer Reports' Web site, further explore the data available on the National Highway Transportation and Safety Administration's site and gather more information about recalls from its readers. Though Consumer Reports has dedicated a section of its Web site to Toyota's braking, floor-mat and acceleration problems, recall information on its individual vehicle review sites has been nearly nonexistent.

Spokesmen for the publication say they're "exploring the possibilities" of adding recall data, but are loath to add such information to their ratings formula, saying recall repairs nullify threats to performance, safety and reliability.

"There are other pieces of data that we have on our Web site and in our products that are not part of our ratings," says Kenneth Weine, spokesman for Consumer Reports. "We have user reviews that are not part of our ratings and many other pieces of information we provide consumers. There's a place for recalls among them."

Consumer Reports uses blogs to disseminate defect and recall information, including a "perceived brake failure" it discovered while testing the 2010 Ford (F) Fusion Hybrid early last month. In December, more than a month before Toyota's sudden-acceleration recalls, Consumer Reports reported that analysis of 2008 model-year data from the NHTSA safety complaints database found that 41% of 166 cases that involved sustained, unintended acceleration involved Toyota and Lexus vehicles. Other consumer advocates say the effectiveness of Consumer Reports and other organizations are limited not only by the scope of their testing and polling, but also by shortcomings in the NHTSA's early-warning reporting system.

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