How will Toyota handle the growing concerns about Prius brakes? An announcement is due this coming week, the maker says.

Toyota has confirmed plans it will deal with braking problems with its popular Prius hybrid model, first reported here back in December, but while a full recall is considered likely, a company source cautioned that the automaker could take less drastic steps, such as a service bulletin, which would make repairs to those who report problems to their dealers.

But with pressure mounting from regulators in the U.S., Japan and other parts of the world, it seems increasingly likely that a recall is the only way out for the maker, an embarrassing step that would drag the company’s halo vehicle – and the most popular gasoline-electric model in the world – into Toyota’s steadily worsening safety crisis.

So far, more than 8 million vehicles have been recalled by the automaker as the result of a pair of problems, including so-called carpet entrapment – in which loose floor mats can jam the throttle wide open – and sticky accelerators.  Several million of those cars, trucks and crossovers are subject to both recalls.

But while Prius is impacted by the carpet entrapment issue, it also appears to be subject to an entirely separate problem involving its compound braking system.  Under certain circumstances, when a 2010-model Prius hits a bump, pothole or slick surface, the brakes appear to release for up to a second, which at 30 miles an hour would translate into a vehicle sliding 44 feet without the ability to stop.

Late Friday, Bob Carter, a group vice president with Toyota Motor Sales USA, sent an e-mail to U.S. dealers advising them the company is working on a fix for the problem that has been reported by well over 100 Prius owners, and should have something to announce early in the coming week.

Separately, the Associated Press quotes Japanese spokeswoman Ririko Takeuchi saying, “We will make an announcement soon on the action we plan to take.”

After initially downplaying owner complaints – first reported on December 24^th by TheDetroitBureau.com – Toyota last week confirmed it not only had a problem with Prius brakes but that it also quietly made repairs affecting the hybrid that were produced at its Japanese plant starting sometime in January.

U.S. spokesman Mike Michels told TheDetroitBureau.com that the automaker needs to mix sure that the fix “will work with cars already in the field,” though it is unclear why that would be a problem if it just involved reprogramming the computers that control the operation of Prius brakes.

Among the options Toyota is considering are:

• A full recall which would notify 2010 Toyota Prius owners there is a problem with their brake system.  Repairs would be done free;
• A service bulletin would advise dealers to make repairs — again for free — should a customer notify them of problems with the brakes on a 2010 Toyota Prius;
• A customer satisfaction program could take steps similar to a recall, though it would be considered less formal and meant simply to address a point of consumer concerns, rather than resolving a clear safety issue.

In the near-term, Prius owners say they will be pleased with any clarification of Toyota’s plans, especially if they now get straight answers from their dealers.

Robert M. Becker, one of the first owners to contact TheDetroitBureau.com regarding his problems with Prius brakes, tried to get his dealership, in Northern New Jersey, to address the problem following Toyota’s concession, last Friday.

“They are still insisting that there is no problem and that the brakes are OK,” Becker said in an e-mail, adding that the store’s general manager, “told me that he hasn’t heard of anyone having this problem – which is an outright lie.”  Becker said he has filed complaints with the dealership on at least three prior occasions and always been told there is nothing wrong.

Jill Krahn, of Wisconsin, has had a better experience, telling TheDetroitBureau.com that after making repeated complaints to the showroom where she bought her 2010 Prius, they have now confirmed they will work with Toyota to make repairs.  The store has, in the meantime, loaned Krahn a new Camry – which was already repaired for the unintended acceleration recalls – until her Prius can be fixed.

Nonetheless, Krahn says, “I am really disheartened and have lost all faith in Toyota,” adding “I would really just like to sell the car back to Toyota.”

This underscores the potential damage the Prius problem is creating for Toyota.  In raw numbers, a recall would be dwarfed by the two actions connected to unintended acceleration – so far, Toyota has sold only about 300,000 of the 2010 hybrid since it was launched, last May, and at least a small number of those appear to have the brake fix already in place.  But the impact of Prius can’t be measured by volume alone, according to independent automotive analyst Dan Gorrell.

The Los Angeles-based consultant cautions that the hybrid is Toyota’s image car – as demonstrated during the last quarter of 2009, when it was the centerpiece of a record $1 billion U.S. marketing campaign by the Japanese maker.  Prius draws in an affluent, well-educated customer base which tends to be environmentally motivated and technologically savvy.  Owners also tend to praise the product, and the Toyota brand overall, more than those who own more conventional models, such as the Camry.

“That can really backfire” on Toyota, stressed Gorrell, and transform the halo car into something that could bedevil the Japanese maker for years to come.