Toyota Halts Production of Eight Models in U.S

The effects of Toyota's massive recalls and production halt on several popular vehicles has hit the Japanese automaker where it hurts — the bottom line. After Toyota announced it was halting sales of eight of its most popular models, the company's stock sank while competitor Ford saw its stock rise.

Toyota saw its stock fall 8 percent, or $7.01, and closed at $79.77 a share. Analysts don't expect this to be a long-term hit to Toyota, as popular cars like the Prius should keep the company afloat in the long-term after it rides out the bad PR stemming from its faulty accelerator problems. Other analysts, meanwhile, see this as a prime time for competitors like Ford or Honda to step in and take a bigger market share, all while pointing to their quality and reputations for excellence.

Toyota has stopped sales of the Camry, Corolla, Avalon, Matrix, RAV4, Tundra, Highlander and Sequoia vehicles. There is no announced date for when those vehicles will be back on sales floors and available to the public.

Dealers might be taking the biggest hit, as not only is corporate pulling the plug on some models while they fix the accelerator issue, but also because consumers are hearing about the problems in news reports on a near daily basis. And with 2009 going down as once of the worst years in the industry, 2010 isn't looking much better for Toyota.

Toyota has halted sales of eight models in the United States while it fixes faulty accelerator pedals that seem to jam and inhibit braking. Several fatal accidents have been attributed to the pedals. Toyota initially blamed the issue on floor mats, but has since re-evaluated the problem and says its an accelerator issue.

The decision to stop sales will hurt more than Toyota's stock. Estimates place the total cost at some $2.4 billion (that's with a B) if the sales stoppage lasts a month. There is no way to accurately predict, analysts say, the long-term damage to Toyota's brand. PR experts point to the way Tylenol handled the cyanide tampering crisis in the 1980s as evidence that it is possible to recover from these problems.

In response to the problems of their competition, American automakers are springing into action. Among the incentives being tossed around is zero-percent financing for Toyota owners who decide to purchase a Ford or GM vehicle instead. Ford even saw its stock rise the same day that Toyota's fell.