Daim­ler re­calls 840,000 ve­hi­cles in US for airbag con­cerns

The Pak Banker - - BUSINESS -

NEW YORK: Daim­ler has said it is to re­call 840,000 U.S. ve­hi­cles with Takata airbag in­fla­tors that could be de­fec­tive, re­sult­ing in a charge of 340 mil­lion euros ($383 mil­lion) for the Ger­man au­tomaker. Daim­ler said late on Tues­day it had de­cided to re­call about 705,000 Mercedes-Benz cars and about 136,000 Daim­ler vans, with­out giv­ing de­tails on which mod­els were af­fected. Daim­ler said it would ac­count for the cost by re­vis­ing its 2015 fi­nan­cial re­sults pub­lished last week, low­er­ing the net profit to 8.7 bil­lion euros and group earn­ings be­fore in­ter­est and tax (EBIT) to 13.2 bil­lion euros, from 8.9 bil­lion and 13.5 bil­lion euros re­spec­tively.

"This (340 mil­lion euros) is quite a big short­fall but the main mes­sage is that the cur­rent fi­nan­cial year will not be af­fected," said Frank­furt-based Bankhaus Met­zler an­a­lyst Juer­gen Pieper who keeps his "buy" rec­om­men­da­tion on Daim­ler's stock. The Stuttgart-based group on Tues­day re­it­er­ated ex­pec­ta­tions that earn­ings from the con­tin­u­ing busi­ness would in­crease only slightly this year af­ter mak­ing big gains in 2015, re­flect­ing higher in­vest­ments and a more mod­er­ate rise in sales in China. Last month Takata Corp said it was declar­ing 5.1 mil­lion ad­di­tional in­fla­tors de­fec­tive af­ter new test­ing and fol­low­ing the death of a driver in De­cem­ber in a 2006 Ford Ranger af­ter an airbag rup­ture. Takata's in­fla­tors can ex­plode with too much force and spray metal shrap­nel into ve­hi­cle pas­sen­ger com­part­ments. They are linked to at least 10 deaths world­wide and more than 100 U.S. in­juries. To date 14 au­tomak­ers have re­called a to­tal of about 24 mil­lion U.S. ve­hi­cles in­volv­ing about 28 mil­lion Takata air bag in­fla­tors. Takata said other au­tomak­ers in­volved in the most re­cent ex­pan­sion in­clude Honda Mo­tor Co, Volk­swa­gen AG (VOWG_p.DE) and its Audi unit, and Mazda Mo­tor Co, Amer­i­can Honda Mo­tor Co, BMW AG and Saab.

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