Toyota Motor Corp. said today it will reshape or replace accelerator pedals on 3.8 million vehicles involved in the company’s largest recall ever.

The company said it will reconfigure the shape of accelerator pedals to cut down on the risk that they may be jammed in the floor mat. In addition, it will replace original equipment floor mats with redesigned mats.

The models involved are:

• 2007 to 2010 model year Camry

• 2005 to 2010 Avalon

• 2004 to 2009 Prius

• 2005 to 2010 Tacoma

• 2007 to 2010 Tundra

• 2007 to 2010 Lexus ES 350

• 2006 to 2010 Lexus IS 250

• 2006 to 2010 Lexus IS 350

In addition, Toyota will install a brake override system on the involved Camry, Avalon, and Lexus ES 350, IS 350 and IS 250 models “as an extra measure of confidence.” The system will shut off engine power if drivers press the accelerator pedal and brake pedal simultaneously.

The automaker said it will send first-class letters to owners of the Camry, ES 350, and Avalon by the end of the year. Owners of the five other models will be notified throughout 2010.

Early next year, dealers will be trained to reshape the pedal. Replacement parts shaped the same way as the reconfigured pedal will be available at dealerships in April, Toyota said. Customers who initially have their pedals reshaped may elect to have them replaced.

A former Toyota engineer who is now with automotive analysis firm Edmunds.com, said in a statement today that the solutions from the recall should work.

“Our tests have confirmed that an out of position floor mat can cause the throttle to stick because of the shape and geometry of the current gas pedal,” wrote Dan Edmunds who served as senior chassis development engineer for Toyota’s Technical Center before joining Edmunds.com as director of automotive testing in April 2006.

“Temporarily shortening and replacing the accelerator pedals are viable solutions to alleviate the problem,” Edmunds wrote.

Toyota, the world’s biggest automaker, announced the recall in late September, citing the risk that a loose floor mat could force down the accelerator, a problem suspected of causing crashes that killed five people.

Toyota has said it has confidence the problem is linked to floor mats and not a vehicle design flaw or problems related to braking, fuel or accelerator systems.

The National Highway Traffic Safety Administration has said discussions included “several vehicle-based” factors that may contribute to pedal interference and a driver’s ability to control and stop the car when the accelerator gets stuck.

Toyota has said that the cost of any related repair work have no effect on its business as the company has set aside nearly 500 billion yen ($5.6 billion) in provisions for recalls.

 Nissan Motor Co. plans to bring a new global small car to the United States after 2010 that will be positioned below its current entry-level product, the Nissan Versa.

Speaking at the company’s headquarters here today, officials said the U.S. market will be part of a major campaign to sell 1 million vehicles a year from a newly created low-cost “V platform.”

The small platform will yield three models: a four-door sedan, a five-door hatchback and a multipurpose vehicle. They will replace the subcompact Micra that is now sold in markets around the world other than the United States.

The European Micra is built at Nissan’s Sunderland, England, plant. It shares a platform with the Japan-market March.

Vincent Cobee, V platform manager, said the plan is Nissan’s effort to dig deeper into the small A and B segments of the auto industry, which, he said, is capturing a growing share of world vehicle sales. The new vehicle will contain a three-cylinder engine.

The current Micra is 146 inches long, almost 2 feet shorter than the 169-inch Versa.

Cobee and other project managers declined to reveal the official name of the upcoming vehicle or say when it will appear at U.S. dealerships. The new platform will be manufactured at five plants around the world, he said, launching first in Thailand in March 2010.

Cobee also declined to specify which of the three models would be offered to U.S. dealers.

In an effort to alleviate losses from the yen’s rapid rise against the dollar, Honda Motor Co. may move production of the popular Fit small car to the United States.

President Takanobu Ito called the shift a “highly likely possibility.”

“Considering the foreign exchange, such a structural reform might be called for,” Ito told Automotive News in an interview today. “That is the sort of direction we are considering.”

The fuel-efficient Fit has weathered the U.S. market slump better than its bigger counterparts in Honda’s lineup. Sales of the hatchback were down 12 percent to 55,475 units for the first nine months of the year, compared with a 25 percent drop for all of American Honda’s lineup.

But all Fits are imported from Japan. And the yen’s 8 percent increase in value against the dollar since August has made their already small profit margins even smaller. A higher yen reduces the value of dollar-denominated revenues that are repatriated to Japan.

About 80 percent of the cars Honda sells in the States are made locally; the rest are imported. Ito said he wants to keep that ratio. But he wants imports to be more high-tech models such as hybrid vehicles, which require the special suppliers and manufacturing plants found in Japan.

“If we could shift this 20 percent to other, higher-value-added technologies, that would be good,” Ito said.

He did not say where in the United States the Fit might be built.

Toyota Motor Corp. plans to start mass producing plug-in hybrid vehicles in 2012, with a projected first-year output of about 20,000 to 30,000 units.

Toyota has said it would start leasing 500 plug-in cars globally by the end of this year, primarily for government and corporate use, but has not said when it would commercialize them.

Toyota’s plug-in hybrids would fan competition against General Motors’ Chevrolet Volt plug-in, which can also be charged at home through an electric socket

GM is aiming to launch the Volt — a showcase vehicle for its effort to reinvent itself after filing for bankruptcy last month — by the end of 2010 and plans to have a total 14 hybrid models in production by 2012.

Plug-ins can be cleaner than regular hybrids as they can run purely on electricity, but the need for more batteries makes them expensive.

Toyota wants to price its plug-in hybrids at a comparable price to Mitsubishi Motors Corp.’s all-electric car, which debuts this month to fleet customers in Japan at 4.59 million yen ($47,800) before government subsidies.

Toyota’s new Prius gasoline-electric hybrid costs less than half that, starting at 2.05 million yen in Japan.

Toyota’s plug-ins will be able to run 20-30 km (12.4-18.6 miles) on battery power alone at full charge, the paper said.

Toyota has said the car will be powered by lithium-ion batteries developed and produced by its joint venture with Panasonic EV Energy Co.

A Toyota spokesman said the company could not comment on future product plans.

Honda Motor Co. may fall short of its U.S. sales goal for the new Insight hybrid by a third in the model’s first year due to the recession and relatively cheap gasoline, Bloomberg reported, citing a top local executive.

“Given some dramatic change in things, I don’t think we’ll get to 90,000. At 50,000 to 60,000, we will be just fine,” Bloomberg cited American Honda Motor Executive Vice President John Mendel as saying.

Japan’s No.2 automaker has forecast annual worldwide sales of 200,000 units for the Insight, which went on sale first in Japan in February and in late March in the United States. Honda expects to sell half of that in North America.

A spokesman in Tokyo said there had been no change in Honda’s sales forecast.

But Honda CEO Takeo Fukui told Reuters last month that while response to the Insight has been good in the United States, Honda was placing priority on meeting brisk demand in the Japanese market partly due to unfavorable exchange rates.

Shares in Honda were down 1.8 percent in mixed trade for Japanese auto stocks.

Citing danger to the national economy, the Bush administration approved an emergency bailout of the U.S. auto industry Friday, offering $17.4 billion in rescue loans in exchange for concessions from the deeply troubled carmakers and their workers.

The government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry.

At the same time, Treasury Secretary Henry Paulson said Congress should release the second $350 billion from the financial rescue fund that it approved in October to bail out huge financial institutions. Tapping the fund for the auto industry basically exhausts the first half of the $700 billion total, he said.

Allowing the U.S. auto industry to collapse in the middle of what is already a severe recession is not a responsible course of action, Bush said.

” It would worsen a weak job market and exacerbate the financial crisis,” Bush said. “It could send our suffering economy into a deeper and longer recession. And it would leave the next president to confront the demise of a major American industry in his first days of office.”

Toyota Motor Corp. is freezing its plan to build Prius hybrids in the United States as it battles a collapse in global profits by cutting spending.Toyota’s board reached the decision late today, Japan time, to halt the $1.3 billion project near Tupelo, Miss., “due to the steep decline” in the United States. Toyota has no timetable on resuming construction, spokeswoman Barbara McDaniel said. The plant will build the Prius when the project resumes.

U.S. sales of the market-leading hybrid have softened as gasoline prices declined from their summer peak of more than $4 a gallon. In November, the Prius accounted for 8,660 U.S. sales, down from 16,737 a year earlier.

Total Toyota U.S. sales fell 32 percent in November.

The move reflects the increasing pressure on Toyota’s global profits. Last month, Toyota said it will do everything it can to meet a reduced operating profit forecast of about $6.6 billion for the fiscal year that ends March 31 — less than half of its initial projection.

Options include halving the number of temporary workers it employs in Japan, delaying new factory launches and cutting r&d costs, Toyota said. Reducing salaries and bonus payments for directors also is on the table.

Toyota has more than a dozen factory projects in the pipeline, including plans to expand vehicle capacity by more than 55 percent in China in the next few years, and to build new car plants in India and Brazil. It also has a new joint venture factory for batteries due in early 2010 to power hybrid cars.

“It would be natural to expect a delay in new factories,” said Tairiku Sakaguchi, auto analyst at Japan’s Shinko Securities.

Speculation about the Mississippi plant’s future has circulated for weeks as Toyota and the rest of the U.S. auto industry slashed North American production. This is the second time Toyota has changed plans on the Mississippi project, which has begun to draw component suppliers to the area.

Toyota originally announced in February 2007 that it would spend $1.3 billion in Mississippi to produce a new generation of Highlander crossovers. After work began, SUV sales began to soften and demand for hybrids grew as gasoline prides soared. In July of this year, Toyota said it would instead build the Prius there.

Toyota said in a statement it will continue constructing the building, which is about 90 percent completed. But the company said it hadn’t yet ordered the equipment that will go into the plant.

The operation has already hired about 100 people for administrative and management positions. Toyota said: “Their jobs are secure.”

Ford Motor Company is seeking to sell Volvo for as much as $6 billion, and is using JP Morgan Chase & Co as an adviser, according to reports in the United States.

Volvo is the last remaining brand from Ford’s former premium auto group that had included the now-divested Aston Martin, Jaguar and Land Rover brands.

Plans to make the Prius at Toyota’s new US plant in Mississippi are being reviewed by a new emergency task force charged with propping up the company’s profits.US production of the Prius, originally scheduled to begin in 2010, could now be pushed back to 2011 or later, Japan’s Nikkei newspaper reported November 14. The newspaper did not cite sources.

Toyota confirmed that the committee is currently reviewing all future products and capital investments.

But nothing has been decided yet, the Japanese automaker said.

“That includes the Prius,” spokeswoman Kayo Doi said.

Toyota’s Mississippi plant had been slated to build the Highlander SUV.

But amid falling sales of big vehicles, Toyota opted instead for the Prius to tap booming demand for fuel-efficient cars.

Nissan North America has dropped out of next year’s Detroit and Chicago auto shows, citing depressed economic conditions.

The decision makes Nissan the biggest automaker to skip out on Detroit’s North American International Auto Show. In addition to Nissan and its Infiniti brand, Mitsubishi, Suzuki, Land Rover, Rolls-Royce and Ferrari have withdrawn from the January venue. Chicago’s show is scheduled for February.

Both events draw media attention from all over the world in addition to displaying product line-ups to local consumers.

Nissan corporate spokesman Alan Buddendeck said the decision reflects the state of the industry and not the Detroit and Chicago shows themselves.

He said the Japanese automaker believes it got its new-product messages for 2009 across at the Los Angeles auto show last week. The company unveiled the 370Z roadster and the upcoming Cube in Los Angeles.

‘Not a small line item’

Automakers across the industry are tightening budgets to conserve cash as sales of new vehicles plummet to 25-year lows.

In comments to reporters in Los Angeles, Nissan CEO Carlos Ghosn said he is no longer interested, for now at least, in creating an affiliation with a North American automaker, as he has been over the past two years. Instead, he said, he is focused on conserving cash.

Buddendeck declined to say how much Nissan will save by pulling out of Detroit and Chicago.

He added: “It’s not a small line item on your marketing budget.”