This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Toyota Woes Give Pause to Consumer Reports

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.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs