Toyota Expands Vehicle Recall in Japan for Air-bag Fix

Toyota Motor Corp. (7203), the world’s largest automaker, expanded a 14-month-old recall of more than 2 million vehicles for faulty air bags after supplier Takata Corp. (7312) told customers further fixes may be needed.

Toyota called back an additional 650,000 vehicles, including Corolla cars, the Toyota City, Japan-based company said today in an e-mail. A total of 2.27 million Toyota vehicles worldwide are affected by the recall because most cars that were called back last year weren’t fixed, spokeswoman Shino Yamada said. The carmaker has received one report of a seat-cover burn related to defective air-bag inflators.

Toyota is the first Japanese carmaker to widen last year’s recall involving Takata’s air bags, with Honda Motor Co. (7267) and Nissan Motor Co. (7201) saying they’re studying the issue. Scrutiny of potential safety flaws is on the rise across the auto industry as General Motors Co. (GM) faces investigations for its recall of almost 2.6 million cars for faulty ignition switches. Toyota is now up to 10.1 million recalls worldwide, while GM has called back almost 14 million in the U.S. alone.

Takata’s American depositary receipts fell 4.3 percent to $42.05 at the close in New York, after the company’s Tokyo-listed stock posted a similar decline for the day’s second-worst performance on the Topix index.

Toyota, Honda and Nissan recalled more than 3 million vehicles last year because of defective air-bag inflators supplied by Tokyo-based Takata. Toyota said it determined that the serial numbers provided by Takata were incomplete and excluded some that were potentially flawed.

Customers Notified

Takata takes the matter seriously and will cooperate with carmakers, spokeswoman Kikko Takai said.

In April, Toyota called back more than 6 million vehicles worldwide, a month after agreeing to a record $1.2 billion settlement with the U.S. Justice Department over its handling of problems with sudden unintended acceleration in vehicles recalled in 2009 and 2010.

Takata notified Honda of potential mistakes with last year’s recall, though there have been no accidents involving Honda cars, said Akemi Ando, a spokeswoman at Japan’s third-largest carmaker. Honda is studying whether to do a recall, she said.

Nissan is investigating whether the air-bag issue affects its vehicles and is in contact with Takata and regulators, Nissan spokesman Chris Keeffe said. Nissan is committed to a high level of customer safety and stands ready to take prompt action as necessary, he said.

Under Supervision

Toyota agreed to an independent monitor of its quality and safety procedures as part of its March settlement, which included the largest criminal penalty ever imposed in the U.S. on an automaker.

President Akio Toyoda has spent years trying to restore Toyota’s reputation for quality after the 2009-2010 recalls. Toyoda, 58, blamed the safety crisis at the company founded by his grandfather on overexpansion in the preceding years.

Toyota has said it will refrain from building new car plants until at least 2016. The company also has said it improved safety procedures by giving regional operations more autonomy to make fixes after being too dependent in the past on decision-making in Japan.

To contact the reporters on this story: Craig Trudell in Tokyo at ctrudell1@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net; Ma Jie in Tokyo at jma124@bloomberg.net

To contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net; Jamie Butters at jbutters@bloomberg.net Chua Kong Ho, Niamh Ring

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