Toyota Joins Honda, Nissan in Car Recall on Airbag Fault

Takata Corp. (7312) faces its biggest recall crisis in almost two decades after defective airbag inflators led Toyota Motor Corp. (7203), Honda Motor Co. (7267) and Nissan Motor Co. (7201) to call back more than 3 million vehicles.

The Japanese safety-gear producer made the products from 2000 to 2002, said Hideyuki Matsumoto, a Takata spokesman. He declined to comment on its customers, who had identified the supplier. According to Toyota, malfunctioning inflators could cause the airbag to deploy abnormally during a crash.

Takata fell as much as 6.7 percent today, following a 9 percent tumble yesterday after Japan’s three biggest carmakers made the announcements. It’s the largest recall involving Takata since 1995, when several automakers called back almost 9 million vehicles to replace faulty seat belts made by the Tokyo-based company -- a record for the auto industry at the time.

The recalls “will likely have a negative impact on near- term earnings at Takata,” Hisahiro Yamaoka, an auto parts analyst at Nomura Holdings Inc., wrote in a report yesterday. The brokerage cut its rating on the company to neutral from buy.

Takata dropped 2.3 percent to 1,777 yen as of 10:23 a.m. in Tokyo trading, compared with a 0.5 percent decline for the Nikkei 225 Stock Average.

Toyota fell 0.5 percent and Honda lost 0.3 percent, both snapping two days of gains. Nissan rose 0.3 percent. Mazda Motor Corp. (7261), which is also recalling vehicles, slipped 0.6 percent.

Other Recalls

Matsumoto confirmed the recall is Takata’s biggest since 1995. More recently, in 2010, Honda recalled 437,763 vehicles to inspect for faulty airbag modules supplied by Takata.

Toyota is recalling 1.73 million vehicles globally and Honda about 1.14 million units, the companies said yesterday. Nissan may call back as many as 480,000 vehicles worldwide, and Mazda said it recalled 45,463 units.

“The involved vehicles are equipped with front-passenger airbag inflators which could have been assembled with improperly manufactured propellant wafers,” Toyota said in a statement. “Improperly manufactured propellant wafers could cause the inflator to rupture and the front passenger airbag to deploy abnormally in the event of a crash.”

Toyota spokeswoman Shino Yamada said five incidents of malfunctions have been reported, though there were no accidents or injuries. Affected vehicles include the Corolla and Camry, and were built between November 2000 and March 2004, she said.

Quick Response

For Toyota, the world’s largest automaker, it’s the second time this year that the company has announced a recall involving more than 1 million vehicles. Last year, Toyota announced a recall of 7.43 million units in October, followed by one involving 2.77 million vehicles the next month.

“After the Toyota unintended-acceleration debacle, automakers have been quick to issue recalls and so there have been a flurry of them in recent years,” said Michelle Krebs, an analyst with researcher Edmunds.com. “As a result, consumers may be tone deaf to them, but they should take seriously any recall -- like this one -- that is related to an important safety feature, especially an airbag, which involves pyrotechnics.”

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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