Toyota discovered a design flaw in the 2010 Hybrid Prius months ago, the company said this morning.
The anti-lock brake-system problem, which required a software change to fix, was corrected in all versions of the company's prized, fuel-efficient car sold since late last month. Toyota also said it would expand its investigation to all of its hybrid models.
Hours later in Washington, federal safety investigators announced they were opening a formal investigation of the Toyota Prius "to look into allegations of braking capability while traveling over an uneven road surface, pothole or bump."
The Office of Defects Investigation, which is part of the National Highway Traffic Safety Administration, said it had reports of problems from 124 Prius owners, including four reports that the problem led to crashes. Investigators have already spoken with the drivers involved, according to the Department of Transportation.
The company is now trying to figure out how to inform customers, many whom bought their cars last year, about the fix.
After owners filed claims across North America and Japan, Toyota representatives said, the company began an investigation.
"We found the cause is in the ABS [anti-lock braking] system," Toyota spokeswoman Ririko Takeuchi said.
Toyota denied charges that it withheld the defect information from the public.
"We get daily claims from dealers and our customers on various troubles," Managing Officer Hiroyuki Yokoyama said as translated at today's news conference here. "We attend to each case by seeking what the problem is and we come up with a remedial plan to improve the quality and to guarantee the quality. That is what we did in January."
Officials stood firm when pressed further about why the company didn't go public with this information sooner.
"I personally think, like I said before," Yokoyama said, "that we try to improve the quality on a daily basis. We would promptly make public announcements to our customers on cases that are decided to be recalled or that need special services."
The decision on a possible recall for Prius -- the third-generation model made here in Japan -- is being investigated.
"Both the ministry and Toyota will do investigations independently," Land, Infrastructure, Transport and Tourism Minister Seiji Maehara said Wednesday. "We will decide if a recall should be considered after the investigation."
This announcement adds to a growing list of problems for Toyota, as it faces its largest recall ever.
Toyota officials defend their handling of the situation.
"In regards to transparency," Yokoyama said, "people say a lot of things but when we are faced with problems, we address them with maximum effort for a prompt response."
Toyota's stock price dropped about 5 percent after the market opened here this morning.
Miki Toda contributed to this report.