Prius brake fix near, Toyota tells dealers

NEW YORK (CNNMoney.com) -- Toyota Motor notified dealers it is prepared to unveil a solution to problems with the brake system of the popular Prius hybrid sedan, as well as a public relations campaign to try to repair its battered image.

In a notice sent to dealerships late Friday, the automaker wrote: "We want to assure our dealers that we are moving rapidly to provide a solution for your existing customers. We will share more specific details on this solution early next week."

A Toyota spokesman declined to comment on the company's communications with dealers, but confirmed that a fix is in the works.

"We are working to provide a solution for the [Prius] braking issue and expect to share more specific details on this solution early this coming week," spokesman Mike Michels said.

The company admitted a problem with the software that controls the anti-lock braking system of the 2010 model of the car, and said it had found a solution for cars that started to roll off of the assembly line in Japan last month. But it has yet to find a solution for the estimated 37,000 cars already on U.S. roads. More than 200,000 of the 2010 model year vehicles have been sold worldwide.

While the National Highway Transportation Safety Administration announced Thursday it had launched a preliminary probe into the brake problem, Toyota has resisted announcing a recall of the vehicles. Toyota CEO Akio Toyoda, grandson of the company's founder, apologized for the problem at a press conference late Friday night in Tokyo, but did not announce the much-anticipated recall, saying the company was still examining the problem.

Toyota has already been hit with a recall of 8.1 million vehicles worldwide to fix problems with sticking gas pedals, a process that will cost it about $2 billion in repair costs and lost revenue, according to the company's estimates. But some experts believe the company could stand to lose more than the 100,000 vehicle sales it estimates, thanks to the lasting damage to Toyota's reputation for quality and safety.

One Toyota dealer said that of customers who have contacted the dealership via email, about 20% said they had lost confidence in the company.

To that end, Toyota's letter to dealers assured them that the company is set to launch a new advertising campaign Sunday "reminds viewers of our 50+ years of history in the U.S., building safe, reliable and high-quality vehicles."

The ad "admits that in recent days we haven't been living up to the standard that's expected of us," said the notice to dealers. "It reminds viewers of the 170,000 Toyota and dealership employees working around the clock to fix their cars and restore their faith in Toyota."

The 60-second ad will appear nationally but will not run during the Super Bowl, the year's premier platform for advertising messages. Other automakers, including Chrysler Group and Korean automaker Hyundai, are set to advertise during the game.

The notice to dealer said the company is talking with its supplier about increasing production of the part needed to repair the problem with sticking gas pedals. And it said Toyota would start shipping the parts directly to dealers from the suppliers, rather than through its normal distribution channel, in order to cut two days off of the delivery time.

A growing problem: The Prius is the automaker's best-selling vehicle in Japan and its No. 4 seller in the United States. Unfortunately for Toyota, the more popular models here -- the Camry, the Corolla and the Rav4 -- were all hit by the gas pedal recall and about a week-long halt in sales as the company searched for a solution to that problem.

Problems with Prius brakes have prompted 124 reports of difficulty stopping in the United States alone, along with four accidents, two of which caused injuries. No fatalities have yet been reported here.

While the problem reports have been limited to the new model year Prius, Toyota said this week it is looking at other hybrid vehicles which use the same braking system: the Lexus HS250h, as well as a Japanese model called the Sai.

The problem causes the brakes to take about a second to take hold when the car is on a road in poor condition. Potholes, snow or rain can trigger the glitch. A car traveling just 30 m.p.h. can travel almost 50 feet in the one second that the brakes are not working.

The fact that there have been so many problem reports with relatively few of the affected 2010 models on the road suggest the problem is far more common than Toyota's other problem with sticking accelerators.

There is also relatively little that a driver facing the Prius brake problem can do other than not panic and continue to press on the brake. Drivers can leave a larger gap between their car and vehicles in front of them, and begin braking sooner before a stop light or stop sign -- especially when faced with poor road conditions.

The problem with the Prius has the potential to be particularly damaging for Toyota since the car was seen by the public as an example of the company's technological and engineering abilities. Its inability to find a quick solution to the problem is further undermining the company's image.

But an analysis of online car shopping by Edmunds.com at the end of the week shows that more people are seriously looking at a Toyota Prius than before the problematic brake news was uncovered. Experts say the increased interest could be due to potential buyers believing that Toyota will soon start offering better deals to support sales of the model.

CNN's Susan Candiotti contributed to this report.