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Toyota Reaffirms Its Position on Emissions Situation

11 January 1999

Toyota Reaffirms Its Position on Emissions Situation

    TORRANCE, Calif., Jan. 11 -- Toyota, the California Air
Resources Board (CARB) and the Federal Environmental Protection Agency (EPA)
have been having discussions regarding the computer that monitors the
evaporative emissions control systems (OBDII) of certain Toyota and Lexus
vehicles.  On Monday, January 4, the Department of Justice, on behalf of EPA,
informed Toyota of their intention to commence litigation in this action,
based on a new interpretation of regulations by CARB, which CARB announced in
a letter to Toyota last June.
    The following statement reaffirming Toyota's position on this matter in
regards to CARB and EPA may be attributed to Jim Olson, senior vice president,
external affairs, Toyota Motor Sales, USA (TMS), Inc.:

    "Toyota is disappointed that despite our vehicles having the best in-use
emission performance of any automaker, this matter has not yet been resolved
in a mutually agreeable manner.  We are proud of our record as an auto
industry environmental leader and firmly believe our vehicles comply with the
testing regulations as originally written.  If California and EPA wish to
change these requirements, they should amend the rules for future model years.
Toyota stands ready to resume negotiations to resolve this disagreement over
proper interpretation of these technical regulations for testing vehicles."

    The facts are as follows:
    -- None of the vehicles pose an emissions concern to the environment or a
       safety threat to consumers.
    -- At this time, there is no recall on the vehicles in question.  CARB and
       EPA are pursuing avenues for further review of the vehicles' operation,
       and possible action that Toyota may be ordered to undertake.
    -- Toyota met with CARB before development of the OBDII system and
       implemented CARB's guidance; we firmly believe that these vehicles
       operate properly and comply with all levels of CARB regulations  --
       including the OBDII regulation.
    -- During the "in-use" evaluation of our vehicles, CARB conducted tests
       beyond those specified in their requirements and regulations.
    -- We contend that no regulatory agency should bring an enforcement action
       on an after-the-fact re-interpretation of a regulation.

    *  A chronology of actions:

    -- Late 1991:  CARB institutes evaporative OBDII regulations
    -- Mid 1995: Toyota's evaporative OBDII system is approved by CARB
    -- August, 1997:  CARB tests Toyota vehicles, questions OBDII performance
    -- August 28, 1998:  Toyota files suit in California Superior Court for
       OBDII rule interpretation
    -- September 2:  CARB begins formal recall process
    -- December 11:  CARB begins administrative review process, breaks off
       negotiations
    -- January 4, 1999:  EPA announces intention to file litigation, seeks
       legal review of case.