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.

"A group like Public Citizen, Consumer Reports or any of the other auto safety groups can be on the ground and hear what kind of problems people are having with their vehicles and can look at what the NHTSA makes public," says Lena Pons, auto analyst for consumer advocacy group Public Citizen. "But we can't see if there are patterns and there's no way for us to know how many investigations they've initiated because there's no public record of it."

While petitioning the NHTSA for expanded access and better organization figures heavily into Consumer Reports' improvements, Weine says the need "not to drag the recall information underground" has made changing its recall coverage process a priority. He says a recent review of Consumer Reports' top picks from recent several years found that more than half had been recalled, showing the need to improve access to recall information.

"It's been our standing advice, when you purchase a used vehicle, that you make sure that any service bulletins or recalls have been performed," says Jeff Bartlett, Consumer Reports' deputy online editor for automotive content. "We have not yet connected the dot indicating what those are, and we've really left it up to the purchaser and the dealer, who can provide that information."

As Nissan and General Motors add to the recall count, organizations like Consumer Reports are under increasing pressure to monitor the car industry more closely and objectively. However, with consumer advocates calling the NHTSA database impermeable and carmakers like Toyota using trade secrecy loopholes to mask defect information, increased transparency may require stricter enforcement of laws like the Transportation Recall Enhancement, Accountability and Documentation Act put in place during the 2000 Bridgestone/Firestone recalls. Until then, Consumer Reports and its angry followers are stuck in post-Toyota gridlock.

"In this case, public-advocacy groups can hardly take responsibility because the databases just don't contain the same information that the NHTSA has," Pons says. "We only have access to the information that's publicly accessible, and some of the most useful information hasn't been publicly accessible."

-- Reported by Jason Notte in Boston.
Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.