Honda Motor on Friday announced a surprise net loss for the fourth fiscal quarter of the year to 31 March 2016 as quality-related costs, mostly to recall Takata-made air bag inflators, almost quadrupled for the full business year.

For the three months to 31 March, the automaker booked a net loss of JPY93.4bn (US$859.56m), compared to the JPY115.35bn yen profit expected in a survey of nine analysts by Thomson Reuters I/B/E/S.

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According to Reuters, Honda said its full-year results absorbed the impact of around JPY267bn more in quality-related costs than its original estimate after the US Transportation Department ordered an expansion of recalls to replace potentially deadly air bag parts made by Takata.

The company said it had set aside JPY436bn for air bag-related costs in the last business year compared with JPY120bn in previous year.

Honda nonetheless forecast a 13.2% rise in net profit for the current year, with strong global auto sales expected to offset the negative impact of a stronger yen.

Honda said it expected group profit for the year ending 31 March 2017 to rise to JPY390bn (US$3.59bn) from the previous year’s JPY344.5bn.

Honda assumes the dollar will average JPY105 this year, compared with last year’s average of JPY120, Reuters noted.

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