U.S. auto safety regulators have stepped up an investigation into the risk that up to 1.2 million Toyota Motor Corp Corolla and Matrix vehicles could stall due to defective electronic engine control units.

Regulators began an engineering analysis on August 18 into reports of stalling in Corolla and Matrix cars from the 2005, 2006 and 2007 model years, sold only in North America.

The U.S. National Highway Traffic Safety Administration (NHTSA) had received 26 complaints of vehicles stalling when it opened a preliminary evaluation at the end of November 2009. It reported 163 complaints when it opened the engineering analysis.

The investigation, which said Toyota had found two potential causes of production defects in the engine control units, comes in a period of intense scrutiny for Toyota, which has recalled about 11 million vehicles in the past year.

The engine can stall at any speed without warning and not restart, NHTSA said in a report on its website.

A Toyota spokesman in Tokyo said the company would continue cooperating with NHTSA's investigation. In a March 2 letter to NHTSA, Toyota's North American regulatory affairs manager Chris Santucci said the company did not believe the alleged defect creates an unreasonable risk to motor vehicle safety.

Shares of Toyota ended morning trade down 0.6 percent in Tokyo, outperforming the broader Topix index's 0.9 percent fall.

(Reporting by David Bailey in Detroit and Chang-Ran Kim in Tokyo; editing by Leslie Gevirtz and Michael Watson)

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