Takata may take up to 3 billion yen charge for additional airbag recalls: sources
TOKYO (Reuters) - Takata Corp (7312.T: Quote) is considering booking a quarterly charge of 2-3 billion yen ($19-$28 million) to cover the cost of additional recalls of vehicles fitted with potentially defective airbags, two people familiar with the matter said.
The additional charge - on top of 75 billion yen previously set aside for airbag recalls - would cover the projected cost of recent recalls announced by Nissan Motor (7201.T: Quote), Honda Motor (7267.T: Quote) and Toyota Motor (7203.T: Quote), said the people with knowledge of Takata's financial projections, who didn't want to be named as they are not authorized to speak for the company.
The charge would likely be booked in Takata's results for the first half of the current fiscal year ending March 2015, they said. Takata is due to report quarterly results on Nov. 6.
The additional charge would represent a partial reckoning for a global auto safety recall that began in 2008 and has included more than 16 million vehicles. Specifically, the charge would represent the projected cost to Takata in response to recalls of a total of about 570,000 vehicles announced recently to fix defective airbags.
Last week, Nissan said it was recalling 260,000 vehicles globally due to defective airbags, while Toyota has also said this month it was recalling 247,000 cars to fix Takata airbags. Honda on Aug. 26 said it was recalling about 63,200 vehicles.
Takata previously announced a charge of around 45 billion yen in the April-June quarter to deal with airbag recalls. In the year to March 2013, Takata took a 30 billion yen charge and posted a record 21.1 billion yen net loss after carmakers recalled 4 million vehicles for defects in its air bags that leave them at risk of exploding with dangerous force in an accident.
Takata said in July it was studying the impact of the 45 billion yen special loss on its full-year forecast.
U.S. safety regulators are investigating whether Takata airbag inflators made in 2000-07 were improperly sealed or subject to another defect.
Airbags inflating with too much force have the potential to spray metal shrapnel at car occupants. Defective Takata airbags have been linked to four deaths in the United States, and dozens of injury claims. The probe by the National Highway Traffic Safety Administration (NHTSA) has focused on inflators recovered from cars being recalled for repairs in hot and humid places like Florida. Continued...