Toyota Recalls More Vehicles Over Deadly Takata Airbags
Toyota recalls more vehicles over deadly Takata airbagsReuters

Toyota Motor has ordered the recall of 57,000 vehicles globally to replace potentially fatal airbags made by Japanese supplier Takata.

Toyota's recall involves some Vitz subcompacts, called the Yaris in some markets, and RAV4 crossover models manufactured 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 small-car arm Daihatsu Motor also issued a recall, in Japan, of 27,571 Mira mini vehicles produced between December 2002 and May 2003 for the same reason.

Toyota's action followed a recall by rival Honda Motor for the same problem two weeks ago after learning of a fifth death, in Malaysia, linked to Takata's airbag inflator.

Toyota's shares ended 0.46% lower in Tokyo trade on 27 November, mostly in line with the broader market.

Takata's shares finished 4.9% lower, after dropping 7.9% in intra-day trade.

Daihatsu's stock lost 1.15% while Honda Motor lost 3.3%.

US Diktat

The US highway safety regulator on 26 November ordered Takata to expand a regional recall of driver-side airbags to cover the entire United States, and not just hot and humid areas where the airbag inflators are thought to become more volatile and launch metal fragments onto car occupants.

Automakers affected include Ford, Honda, Chrysler Group, Mazda and BMW.

The US National Highway Traffic Safety Administration (NHTSA) gave Takata until 2 December to issue a nationwide recall, and could fine it up to $7,000 per vehicle if it fails to obey.

But takata has thus far avoided expanding the recall, saying that could divert replacement parts away from the high-humidity regions that need them most.

Bankruptcy?

Nomura Credit Research analyst Shintaro Niimura said in a 26 November report that a US-wide recall of driver-side air bags could cost an estimated 70bn yen ($596m, £378m, €477m).

Niimura said: "Takata could need nearly 200bn yen ($1.7bn) 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," 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.

Over 16 million vehicles have been recalled globally since 2008 over Takata's airbag inflators.