Honda expands airbag recall, Toyota faces more probes

Honda Motor Co said it would recall another 440,000 cars around the world for faulty airbags.

Honda expands airbag recall, Toyota faces more probes

Honda Motor Co said it would recall another 440,000 cars around the world for faulty airbags as rival Toyota Motor Corp faced further probes over its largest-ever safety crisis.

Honda, Japan's No.2 automaker, has now recalled close to 950,000 vehicles for the airbag problems linked to one fatality and a total of 11 injuries in the United States.

While auto recalls are not uncommon and the size of Honda's is not massive, it comes at a sensitive time for the industry.

Automakers are struggling to draw customers back to showrooms after a brutal downturn during the financial crisis, and Toyota, the world's largest carmaker, is facing criticism over safety issues and its response to them.

U.S. regulators said they are reviewing complaints about potential steering problems in newer Toyota Corollas.

The National Highway Traffic Safety Administration (NHTSA) said it is discussing the matter with Toyota to see if a formal investigation is warranted, a standard procedure when reviewing complaints.

Toyota expanded its largest ever recall on Tuesday, including more than 400,000 of its latest version Prius and other new hybrid models due to braking problems. It also recalled more than 7,300 late model Camrys in the United States for an unrelated braking problem.

That comes on top of some 8.1 million vehicles recalled since September for problems with slipping floormats and sticking accelerator pedals that have been linked to crashes that killed at least 19 people.

A U.S. congressional committee postponed a hearing scheduled for Wednesday to examine the recalls and Toyota's response due to a snowstorm expected to hit Washington.

Toyota President Akio Toyoda said on Tuesday he may travel to the United States next week to tackle criticism that his company moved too slowly on earlier recalls.

"Media reactions somewhat overblown"

Honda chief financial officer Yoichi Hojo told Reuters that the recall of 437,763 vehicles will likely cost it an estimated 2 billion yen to 3 billion yen ($22 million to $33 million).

The moves and costs come on top of a recall first announced in November 2008 for 4,200 Accord and Civic sedans due to faulty airbag inflators, and expanded last June to cover an additional 510,000 vehicles globally.

The faulty inflators could produce too much pressure and risked rupturing their casings, sending shards toward the driver in an accident.

The airbags are made by the U.S. unit of Japan's Takata Corp, a Honda spokesman said. A spokesman at the supplier said the company was not aware of any defect in airbags it supplies to other automakers.

Hojo said Honda will ask Takata for a compensation of some sort and to improve its production line, as the defect originated in the manufacturing process, not in the design approved by Honda.

The latest recall applies to 2001 and 2002 model-year Accord, Civic, Odyssey, CR-V, Pilot and 2002 Acura TL and CL vehicles in the United States, as well as the Inspire, Saber and Lagreat in Japan. All vehicles are made at Honda's U.S. and Canadian plants.

Last month, Honda announced a global recall of about 646,000 cars for a fault with a window switch.

Some analysts said automakers regularly make recalls, and media reactions to recent cases have been somewhat overblown.

"While the way automakers handle recalls is important, I think people should be careful not to overreact to every single recall," said Yoshihiko Tabei, chief analyst at Kazaka Securities.

"Rather, my concern for the auto industry is their earnings for the next financial year, given the absence of the boost they enjoyed from government incentives this year."

Honda shares closed 1.6 pct lower in Tokyo market up 0.3 percent, while shares of Toyota, which lost about a fifth of their value since late January, rose 0.4 percent.

($1=89.75 Yen)


Reuters

Last Mod: 10 Şubat 2010, 12:25
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