Toy­ota to widen ve­hi­cle re­call over deadly air bags

The Star Early Edition - - BUSINESS REPORT INTERNATIONAL - Chang-Ran Kim and Mari Saito

TOY­OTA yes­ter­day said it would re­call 57 000 ve­hi­cles glob­ally to re­place po­ten­tially deadly air bags made by Takata, as a safety cri­sis sur­round­ing the Ja­panese auto parts maker looked far from be­ing con­tained.

Toy­ota’s ac­tion fol­lows a re­call by ri­val Honda for the same prob­lem two weeks ago after rev­e­la­tions of a fifth death, in Malaysia, linked to Takata’s air bag in­fla­tor. More than 16 mil­lion ve­hi­cles have been re­called world­wide since 2008 over Takata’s air bag in­fla­tors, which can ex­plode with too much force and spray metal frag­ments into the car.

Toy­ota is re­call­ing some Yaris and RAV4 crossover mod­els made be­tween De­cem­ber 2002 and March 2004. About 40 000 are in Ja­pan, 6 000 in Europe and the rest in other mar­kets out­side North Amer­ica. Toy­ota said it was not aware of any in­jury or death re­lated to the re­call.

Sep­a­rately, Toy­ota’s small­car sub­sidiary Dai­hatsu also is­sued a re­call, in Ja­pan, of 27 571 Mira minive­hi­cles pro­duced be­tween De­cem­ber 2002 and May 2003 for the same rea­son – its first re­call in­volv­ing Takata in­fla­tors. About 2.6 mil­lion ve­hi­cles have been re­called in Ja­pan so far for Takata’s air bag in­fla­tors, a trans­port min­istry of­fi­cial said.

Takata-re­lated re­calls are almost cer­tain to bal­loon after US safety reg­u­la­tors on Wed­nes­day or­dered the company to ex­pand a re­gional re­call of driver­side air bags to cover the en­tire US, not just hot and hu­mid ar­eas where the air bag in­fla­tors are thought to be­come more volatile. Takata has so far re­sisted ex­pand­ing the re­call, say­ing that could di­vert re­place­ment parts away from the high-hu­mid­ity re­gions that need them most.

A US-wide re­call of driver-side air bags could cost an es­ti­mated 70bn yen (R 6.58 bn)

The US Na­tional High­way Traf­fic Safety Ad­min­is­tra­tion (NHTSA) has given Takata un­til Tues­day to is­sue a na­tion­wide re­call, and could fine it up to $7 000 (R76 730) per ve­hi­cle if it doesn’t com­ply. It re­mains un­clear how many more vehi- cles that would add, but it could be in the mil­lions, af­fect­ing five au­tomak­ers: Ford, Honda, Chrysler, Mazda and BMW.

A US-wide re­call of driver­side air bags could cost an es­ti­mated 70bn yen (R6.58 bn), said No­mura Credit Re­search an­a­lyst Shin­taro Ni­imura.

“Takata could need nearly 200 bil­lion yen (R18.63 bn) of re­serves in the event of a US na­tion­wide re­call (in­clud­ing pas­sen­ger-side air bags), and the company’s cash-on-hand would be tightly squeezed,” he wrote, not­ing Takata had just 8.33bn yen of cash and de­posits.

“If the company makes any mis­steps, we can­not say that there is ‘zero’ chance of the company dy­ing a sud­den death – that is, be­ing hit with ex­ces­sive debt or fac­ing a cash-in­sol­vency bank­ruptcy,” Ni­imura added.

NHTSA’s ac­tion and the lat- est re­calls come on the heels of an an­nounce­ment by Ja­pan’s trans­port min­istry on Wed­nes­day that it re­ceived a re­port of an “un­usual de­ploy­ment” of a Takata air bag as it was be­ing re­moved from a scrapped car on Novem­ber 6. The in­fla­tor was man­u­fac­tured in Jan­uary 2003 at Takata’s Mon­clova, Mex­ico fac­tory, and had not been sub­ject to re­calls, at least in Ja­pan, rais­ing the prospect of an ex­panded re­call.

A Toy­ota spokesman said the scrapped car was a 2003 Will Cypha, a Ja­pan-only com­pact model that is no longer in pro­duc­tion. Toy­ota said it was in­ves­ti­gat­ing the is­sue as part of its wider probe into Takata’s air bag in­fla­tors.

“We will take prompt and ap­pro­pri­ate ac­tion if we find there is a need for a re­call as a re­sult of the in­ves­ti­ga­tion,” it said. – Reuters

PHOTO: REUTERS

An en­gi­neer ex­plains the cam­era and sen­sor tech­nol­ogy that was used dur­ing the de­vel­op­ment of Toy­ota’s driv­ing support sys­tems and au­to­mated driv­ing sen­sors on Wed­nes­day. Toy­ota plans to re­call 57 000 ve­hi­cles over faulty air bags.

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