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Honda’s Recall Costs Could Balloon to $2.3 Billion
Massive recalls to replace Takata Corp. airbag inflators that could explode could hike Honda Motor Co.’s expected quality-related costs by one-third this year, The Nikkei predicts.
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Massive recalls to replace Takata Corp. airbag inflators that could explode could hike Honda Motor Co.’s expected quality-related costs by one-third this year, The Nikkei predicts.
Honda forecast in April that its recall spending would be in the low 200 billion-yen (about $1.7 billion) for the fiscal year ending next March 31. Now the total is likely to reach 280 billion yen, according to the newspaper, which cites no sources.
A dozen carmakers are recalling roughly 40 million vehicles worldwide to replace the Takata devices, which appear to become unstable after lengthy exposure to heat and moisture. The Nikkei says nearly 25 million of the affected vehicles are Honda models.
The carmaker has been Takata’s largest customer. But Honda declared in early November it will abandon the supplier after U.S. regulators fined Takata $70 million for manipulating test data and hiding its problems from customers and safety agencies.
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