Toyota Motor Corp. shares sank rapidly Wednesday after U.S. Transportation Secretary Ray LaHood advised in congressional testimony that people stop driving any cars involved in the Toyota recall, though the declines eased somewhat after the secretary clarified his statement.
Testifying before the House Appropriations committee, LaHood was asked what advice he would give to owners of Toyotas subject to the recall. LaHood was scheduled to speak to the committee, which controls the government's spending, about the fiscal 2011 budget proposals.
"My advice is, if anybody owns one of these vehicles, stop driving it, take it to the Toyota dealer because they believe they have the fix for it," LaHood said.
Afterwards he told reporters that wasn't what he meant to say.
"What I said in there was obviously a misstatement," LaHood said outside of the hearing room. "My advice is if you have one of these vehicles, if you are in doubt, take it to the dealership today."
DOT spokesman Bill Adams said in an email, "The DOT is advising owners of recalled vehicles to contact their local dealerships to arrange for fixes as soon as possible."
The Japanese auto maker said Monday it has the fix for the problem and would begin shipping the new parts to auto dealers.
A Toyota representative couldn't immediately comment on LaHood's statement.
Shares sped up their declines after LaHood's comments, falling as low as $71.90 Wednesday. They have now pared those losses since the clarification, and closed at $74.24,
Since the recalls were announced, Toyota shares have lost 20 percent, falling to their lowest levels since early April.
Toyota last week had to halt production and U.S. sales of eight models in response to rising concerns that the vehicles could suddenly speed up on their own. It has issued two recalls totaling about 6 million vehicles to replace floor mats that can get jammed against the gas pedals, and gas pedals that can develop a tendency to get stuck in an open-throttle position.