Toyota to buy back rusted Tacomas

DETROIT (Reuters) - Toyota Motor Corp <7203.T> has offered to buy back Tacoma pickup trucks with frames rusted beyond repair and to extend the warranty on over 800,000 of the vehicles in North America.

The unusual customer-service action comes amid slumping U.S. truck sales and at a time when the world's No. 1 automaker faces new scrutiny after a string of glitches that has threatened to mar its industry-leading reputation for quality.

Toyota is offering to buy back Tacoma trucks built between 1995 and 2000 with frames deemed to be so badly rusted they cannot be repaired at one and a half times the most generous resale value as calculated by Kelly Blue Book.

In addition, the Japanese automaker will extend the warranty on Tacoma frames from the standard 3-years or 36,000 miles to 15 years with unlimited mileage for the rust problem.

The cost of the sweeping buyback and extended warranty program was not clear. A Toyota spokesman could not be immediately reached for comment at the automaker's Los Angeles-area sales headquarters.

A Toyota letter to its North American dealers outlining the terms of the action and other company documents pertaining to the problem with Tacoma frames rusting were posted on the Web site of the Washington, D.C.-based Center for Auto Safety.

Toyota said it expected that a small number of the 813,000 trucks covered by the action would have frames so rusted it would require a buyback. Those were more likely to be in areas with heavy snow that are exposed to road salt, it said.

The Tacoma frame rust appears to stem from a production problem that kept the components from getting enough undercoating when they were built, the automaker said.

Letters to Tacoma customers began going out in March.

Toyota sold 2.41 million vehicles on a global basis in the first quarter, extending its sales volume lead over rival General Motors Corp.

The sales gains have come despite weaker industry sales in the U.S. market, which remains the world's largest. Toyota U.S. sales were off some 5 percent in April after adjusting for the number of selling days in the month.

Sales of Toyota's just-introduced Tundra pickup also dropped in April, the first decline since the launch of the launch of the all-new full-size truck in 2007.

Industry-wide U.S. vehicle sales have come under pressure from a weaker U.S. economy and consumer confidence coupled with a shift to more fuel-efficient cars from trucks and sport utility vehicles.

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