Only last month Toyota was forced to recall more than 7.4 million vehicles worldwide.
Defect in steering shaft could lead to a loss of control.
In another humiliating setback for the world's biggest carmaker, Toyota has recalled 2.77 million cars due to a fault that could result in the loss of steering. The recall applies to 12,710 Prius hybrids imported to Australia between 2003 and 2009, and a range of other models around the world -- including the popular Corolla.
Toyota said in a statement the steering intermediate extension shaft may not have been adequately hardened, allowing the splines that connect the extension shaft to the steering box to deform and wear out if the steering wheel is "frequently and forcefully turned into full lock while driving at a slow speed".
Toyota Australia spokesman Mike Breen said in the "worst case scenario a motorist continuing to drive under the conditions may cause the shaft to wear out, resulting in loss of control". He said there have been three reported cases in Australia so far, none of which has resulted in incidents.
The Prius is affected by an additional recall for a defective water pump. It is news Toyota does not need as it tries to retain its global primacy ahead of General Motors. Only last month Toyota was forced to recall more than 7.4 million vehicles worldwide to fix faulty power window switches. The auto giant had barely recovered from the record 10 million vehicle pull back in 2009.