Takata Airbag Recall Update: Honda Adds 21M More Cars Affected, Posts Quarterly Loss

Honda Motor Co. saw a loss last quarter after the company recalled a massive number of its cars to replace defective Takata airbags, Reuters reported Friday. While the company has spent a significant amount on recall costs in recent years, it forecast a rebound this year as it has taken steps to move beyond the airbag problems.

The carmaker also said it would recall 21 million more vehicles to replace the defective Takata airbags, adding to the 30 million cars it has previously recalled. This latest recall will mean Honda has replaced all the ammonium nitrate-based inflators that do not use a chemical drying agent, which causes the potentially deadly airbag problems, Executive Vice President Tetsuo Iwamura said during an earnings briefing.

Honda is Takata’s biggest customer, and the defective airbags are believed to be responsible for at least 11 deaths and more than 100 injuries since 2008. The ammonium nitrate, which is used to inflate the airbag, can cause the inflator to rupture when exposed to moisture. This has resulted in the airbag spraying shrapnel into passengers.

Honda and Toyota Corp., which also uses Takata airbags, had recalled more than 60 million airbags around the world before the latest order, Bloomberg reported.

For the three months ending March 31, Honda recorded a net loss of 93.4 billion yen, or $860 million, which fell short of expectations for 115.35 billion yen ($1.06 billion), Reuters reported. The company said its quality-related costs were about 267 billion yen ($2.44 billion) more than its original estimate after the U.S. National Highway Traffic Safety Administration ordered it to recall 40 million more Takata airbags.

In the last business year, the company said it put aside 436 billion yen ($3.99 billion) for airbag-related costs, nearly four times the 120 billion yen ($1.1 billion) it spent in the previous year.