UPDATE 1-U.S. agency steps up probe into Corolla stalling

* Investigation covers model years 2005-07

* Covers 1.2 mln Corolla and Matrix cars sold in N.America

* Cars could ‘stall at any speed without warning’-NHTSA

* Toyota shares down 0.6 pct, outperform Tokyo market
(Adds Toyota comment, share price moves)

DETROIT, Aug 23 (BestGrowthStock) – U.S. auto safety regulators have
stepped up an investigation into the risk that up to 1.2 million
Toyota Motor Corp (7203.T: ) Corolla and Matrix vehicles could
stall due to defective electronic engine control units.

Regulators began an engineering analysis on Aug. 18 into
reports of stalling in Corolla and Matrix cars from the 2005,
2006 and 2007 model years, sold only in North America.

The U.S. National Highway Traffic Safety Administration
(NHTSA) had received 26 complaints of vehicles stalling when it
opened a preliminary evaluation at the end of November 2009. It
reported 163 complaints when it opened the engineering analysis.

The investigation, which said Toyota had found two potential
causes of production defects in the engine control units, comes
in a period of intense scrutiny for Toyota, which has recalled
about 11 million vehicles in the past year.

“The engine can stall at any speed without warning and not
restart,” NHTSA said in a report on its website.

A Toyota spokesman in Tokyo said the company would continue
cooperating with NHTSA’s investigation. In a March 2 letter to
NHTSA, Toyota’s North American regulatory affairs manager Chris
Santucci said the company did not believe the alleged defect
“creates an unreasonable risk to motor vehicle safety”.

Shares of Toyota ended morning trade down 0.6 percent in
Tokyo, outperforming the broader Topix index’s (.TOPX: ) 0.9
percent fall.
(Reporting by David Bailey in Detriot and Chang-Ran Kim in
Tokyo; editing by Leslie Gevirtz and Michael Watson)

UPDATE 1-U.S. agency steps up probe into Corolla stalling