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Japan's Takata books bigger special loss to cover air bag recalls, other costs
February 5, 2015 / 6:54 AM / 3 years ago

Japan's Takata books bigger special loss to cover air bag recalls, other costs

TOKYO, Feb 5 (Reuters) - Japanese auto parts maker Takata Corp booked nearly $30 million in extra charges to cover vehicle recalls to replace potentially deadly air bag inflators, as well as other costs, pushing it to a bigger loss this year than previously forecast.

Takata, at the centre of a long-running global recall crisis, said on Thursday said it booked a total special loss of 53.1 billion yen ($453 million) to cover recalls and other quality costs in the first three quarter of its fiscal year. It already booked a special first-half loss of 49.9 billion yen ($426 million).

Reporting a net loss of 32.5 billion yen for the nine months ended December, Takata cut its full-year net loss forecast to 31 billion yen ($265 million), against a previous loss forecast of 25 billion yen. A poll of four analysts by Thomson Reuters I/B/E/S before Thursday’s warning had estimated the loss would be 30.13 billion yen.

Takata’s air bag inflators have been found to explode with too much force, spraying metal fragment inside cars. The component has been linked to six deaths, all on cars made by its top customer, Honda Motor Co.

The defect has led to the recall of about 25 million cars globally since 2008, including voluntary fixes to find out what is causing the defect. Automakers are shouldering the cost of such investigative recalls, paying Takata for replacement parts at least until a cause is identified as the responsibility of the supplier. ($1 = 117.1200 yen)

Reporting by Chang-Ran Kim and Mari Saito; Editing by Kenneth Maxwell

Our Standards:The Thomson Reuters Trust Principles.
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