It was the kind of monthly sales result that would put any automaker, especially the world’s largest with a vaunted reputation for quality, to shame.
In August, Toyota Motor North America reported a pair of negative sales figures for its new large three-row crossovers — a -6 for the Toyota Grand Highlander and a -5 for the Lexus TX. The negative integers mean that U.S. dealerships sold neither of the two giant crossovers and actually bought back nearly a dozen from consumers.
The two large crossovers are the subject of what has been a costly sales shutdown for the automaker and its dealers after it failed a random NHTSA audit in May involving the vehicles’ side curtain airbags. Toyota now has a plan to fix consumer vehicles and restart its idled production in Indiana by the end of October, Kent Rice, group vice president of Toyota Motor North America’s quality division, told Automotive News.
Toyota has redesigned the long curtain airbags on the driver and passenger sides, starting with consumer-owned vehicles and those in dealer inventory. Rice said consumers should begin receiving notifications in October to schedule their repair appointments. With production paused, there are about 158,000 of the three-row vehicles that will need to be repaired, including about 4,000 in dealer inventory, Toyota said.
“We’ve made mistakes, right? It’s a difficult and complex business. But one thing I’m proud of is that despite the fact that this has been painful, that we have anxious customers and dealers who can’t sell vehicles because of the airbags, there’s never been any discussion or issue of cost,” Rice said.
“It’s just about what we need to do to make it right for the customer. This is our opportunity to put our values into action.” In May, NHTSA conducted a random compliance audit of the Grand Highlander to determine whether it met Federal Motor Vehicle Safety Standards. “We failed,” Rice said.
With the driver’s side window down, the curtain airbag — which deploys from beneath the headliner along the vehicle to protect passengers’ heads from hitting the windows — was unable to remain fully inside the cabin, with one front corner sticking out, and was therefore out of compliance.
The result “was not expected. We started to realize that the result was not what we had seen during development. There were some variations that had accumulated in the manufacturing process that we had not considered,” Rice said.
Toyota engineers initially tried to recreate what had happened in the government test and got the same result. The automaker issued the initial recall and stop-sale notice on June 20 and began working to find a solution.
“Once we understood the phenomenon, we had to determine what countermeasure path we would take,” said Rice, a mechanical engineer by training who joined Toyota as a quality engineer in 1991.
With the support of what Rice called “several key suppliers,” Toyota engineers modified the airbags’ anchoring systems, called tethers.
In testing, the modified airbag performed as expected and will bring the Grand Highlander and Lexus TX back into compliance.
Having a plan in place that will soon bring the big three-row crossovers back into the lineup is music to the ears of dealers, who met recently in Las Vegas.
In the first half of the year, Toyota averaged sales of about 9,200 Grand Highlanders per month, while Lexus dealers in the U.S. sold an average of about 3,500 TXs.
The Grand Highlander has proven so popular that Toyota plans to convert the smaller three-row Highlander into an EV in 2026 because the larger vehicle has cannibalized Highlander volume. Through June, Highlander sales were down 47% in the U.S., to 113,264.
“Obviously, the Grand Highlander is a cold home run, but we need to be able to sell them,” said Mark Montenero, president of the Toyota National Dealer Advisory Council. “Right now, we have a line of vehicles that we can’t sell, which is one of the hottest in the industry. But they’re going to fix it, and they’re going to do it right. That’s what Toyota does.”