Honda share price steady, recalls 4.9 million cars over Takata air bags

Honda Motor Co joined on Thursday fellow Japanese carmakers Toyota Motor Corp and Nissan Motor Co in the latest round of air bag related recalls, announcing it will pull back 4.9 million vehicles with potentially faulty air bag inflators.

Honda, Takatas biggest customer, said its latest recall involves popular models such as the Accord, CRV, Civic and Fit, manufactured between 2002 and 2008. None of the cars with potentially flawed air bags were sold in the US, but 1.72 million vehicles will be recalled in Japan.

The action involves 1.67 million driver-side air bags and 3.22 million passenger-side ones, bringing the total number of Honda recalls related to the problem to 19.6 million vehicles, a company spokeswoman said.

This comes only a day after Japanese rivals Toyota and Nissan announced they will collectively withdraw 6.6 million vehicles due to risk of moisture intrusion on certain types of air bags produced by Takata. This brought the total count of recalls linked to the issue to around 31 million vehicles by more than 10 carmakers since 2008, now almost 36 million, with the majority of pullbacks having taken place over the past couple of years.

Six deaths have been linked to air-bag explosions, all in Honda cars, but the three Japanese companies said no new accidents were related to the latest round of recalls and that these were preemptive measures.

“Among the parts collected from the Japanese market, certain types of air-bag inflaters were found to have a potential for moisture intrusion over time,” Toyota said in a statement on Wednesday. “As a result, they could be susceptible to abnormal deployment in a crash.”

Takata’s air bag inflators are susceptible to absorbing moisture, experts state, which in turn can cause damage and lead to an explosion of the metal casing upon deploying the air bag. Toyota, however, said yesterday that the relationship between moisture intrusion and a rupturing of the inflators remains uncertain.

Toyota plans to replace air bag inflators on the driver’s side with ones made by Japans Daicel Corp, while passenger side air bags will be refitted with newly manufactured Takata inflators. Honda said it will use replacement parts by Swedens Autoliv, Daicel and Takata.

A Takata spokeswoman said a probe into the causes of the defects was ongoing and that the company is fully cooperating with the auto manufacturers, while US and Japanese safety regulators have launched a separate probe. The air bag maker faces multiple class action lawsuits in the US and Canada.

Takata hopes to return to profit in the current fiscal year after a 29.6-billion-yen net loss for the business year ended March 31st 2015. However, officials said the outlook doesnt take into account additional recall-related costs in the future as they are difficult to estimate during the ongoing investigations, while expenses tied to the latest recalls are still unknown.

Takata Corp shares tumbled 5.4% on Thursday in Tokyo to 1 515 yen, following a combined 3.6% decline the previous two days.

Honda Motor Co Ltd settled 0.07% lower at 4 188 yen per share, marking a one-year increase of 21.57%. The car maker is valued at 7.56 trillion yen. According to the Financial Times, the 22 analysts offering 12-month price targets for Honda Motor Co Ltd have a median target of 4 130 yen, with a high estimate of 5 000 yen and a low estimate of 3 100 yen. The median estimate represents a -1.46 % decrease from the previous close of 4 191 yen.