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Takata Airbag Recall Expands to Honda, Nissan & Mazda

Zacks Equity Research

The Takata Corp. airbag recall has expanded from Toyota Motor Corporation (TM) to include Honda Motor Co., Ltd. (HMC), Mazda Motor Corporation (MZDAF) and Nissan Motor Co. Ltd. (NSANY). The faulty Takata-made airbag inflators can explode and shoot metal shrapnel at the driver and passengers, thus injuring them.

All these automakers, along with BMW, had recalled 3.6 million vehicles equipped with Takata airbags for the same problem last year as well. However, the airbag manufacturer now believes that all defective airbags were not covered by that recall, resulting in the additional recalls being made now.

This time, Honda has recalled 2.03 million vehicles globally, of which 1.02 million are in North America and nearly 669,000 are in Japan. The recalled vehicles include Civic, CR-V, Odyssey and Element manufactured between 2000 and 2005. The Japanese automaker had recall nearly 1 million vehicles for the problem last year.

Nissan has recalled 755,000 vehicles across the globe, of which nearly 250,000 are in North America. Meanwhile, Mazda has recalled 159,807 vehicles globally, including 15,000 in North America.

Earlier this month, Toyota had announced the recall of nearly 2.27 million vehicles to fix the problem related to Takata airbags. According to Reuters, total recalls related to Takata airbags have amounted to nearly 10.5 million vehicles over a span of 5 years.

While no accidents were reported by Honda, Nissan and Mazda due to the faulty airbags, Toyota reported a fire caused due to it. Moreover, the National Highway Traffic Safety Administration (:NHTSA) has reports of at least 6 airbag explosions and 3 injuries in Florida and Puerto Rico. Last year’s recalls were also linked to 2 casualties.

The recalls are set to increase further as the NHTSA has requested seven automakers to announce recalls in regions with high humidity such as Florida, Puerto Rico, Hawaii and the Virgin Islands. These automakers include Toyota, Honda, Mazda, Nissan, BMW, Fiat S.p.A.’s (FIATY) Chrysler and Ford Motor Co. (F).

Takata is one of the largest global suppliers of automotive safety systems and products. The defective airbags were manufactured by the company in the United States and Mexico between 2000 and 2002. Inappropriate storage and exposure to moisture damaged the propellant, which is causing the current problem. The NHTSA is currently investigating whether airbags manufactured after 2002 are also affected by the problem.

Currently Toyota, Ford and Nissan carry a Zacks Rank #3 (Hold), Fiat has a Zacks Rank #4 (Sell) and Honda carries a Zacks Rank #5 (Strong Sell).

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