Takata Corporation, the Japanese maker of air bags at the centre of an auto industry-wide safety crisis, has recovered from its biggest-ever drop in Tokyo share trading after saying additional charges related to recalls would be small.
According to Bloomberg News, shares in the supplier rose as much as 10% to JPY1,858 yen on 22 October, the biggest intraday gain since May. Takata plunged 23% the previous day after the US NHTSA told motorists to urgently take taking at least 4.7m recalled cars to dealerships for fixes to potentially deadly air bags [the tally has since been hiked to 7.8m – ed].
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“Takata takes this issue seriously and will cooperate with officials and carmakers to fix these parts,” the company said in a statement filed with the Tokyo Stock Exchange cited by Bloomberg. Any additional costs beyond the JPY45bn (US$421m) one-time charge booked in its fiscal first quarter “should be very limited”, according to the statement.
Takata is under rising scrutiny amid escalating global recalls related to its faulty air bags.
Bloomberg noted that [as Toyota and other automakers also have done] GM plans to warn owners of vehicles in warm weather areas not to allow front-seat passengers until defective air bags are replaced. The largest automaker built the 2003 and 2004 Pontiac Vibe hatchback models in a now ended partnership with Toyota which itself recalled 247,000 vehicles on 20 October. Toyota said then it would tell dealers to disable passenger side airbags and tell drivers to limit other occupants to the back seat until the cars are repaired.
Takata has forecast a net loss of JPY24bn (US$224.9m) for the fiscal year ending 31 March. The company reported a JPY21.1bn loss in the year ended 31 March 2013, when it booked JPY30bn in recall-related expenses, Bloomberg added.
