Toyota Motor Corp. has agreed to compensate owners of Lexus and Toyota vehicles that suffered engine damage due to a buildup of thickened oil, or sludge, in a settlement approved this week by a Louisiana state court.
The agreement covers 3.5 million 1997-2002 model-year vehicles, although it is not known how many were damaged by sludge.
Toyota agreed to settle the 2001 class-action suit last fall, and says the terms are the same a sprogram the automaker put in place in 2002 to reimburse customers for sludge-related engine damage.
"The terms of the settlement and the settlement itself have no finding of defect," Toyota spokesman Xavier Dominicis said.
Excessive heat, sediment or poor oil condition may cause engine oil to thicken and clog narrow engine passages, depriving the engine of lubrication and causing damage. With engine replacements costing thousands of dollars, the ultimate expense to Toyota may run into the billions.
The high-profile suit has dealt a blow to Toyota's reputation, but other automakers -- including DaimlerChrysler AG's Chrysler Group, Volkswagen AG and General Motors Corp.'s Saab brand -- have faced similar complaints.
Automakers blame poor maintenance, such as infrequent oil changes, but some experts suspect engine design. "There isn't a consensus," said Karl Brauer, editor in chief of the online automotive research site Edmunds.com.
The settlement covers certain model years between 1997 and 2002 for the Toyota Camry, Solara, Avalon, Celica and Lexus ES300 cars, and the RX300 and Highlander SUVs. The amount "is tailored to your damages," said attorney Gary Gambel of Murphy, Rogers, Sloss & Gambel in New Orleans.
