The threat to safety has become so acute that Toyota Motor Corp (ADR) (NYSE:TM) (TYO:7203) is advising car owners not to allow passengers to ride in the front seat until it has replaced defective Takata Corporation (TYO:7312) (OTCMKTS:TKTDY) air bag parts. Four months ago the same advice was given in Japan.
Air bags manufacturer Takata is under investigation concerning the role of exploding shrapnel from its flawed parts in the death of four Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) drivers. One crash in Florida was even investigated as a homicide due to deep gashes in the neck of the deceased.
Air Bags: Wider problems with recalls
The auto industry has come under fire for its response to defects following General Motors Company (NYSE:GM).’s botched ignition switch recall, and previous Toyota recalls due to unintended acceleration in 2009 and 2010.
Toyota, the world’s largest automaker, recalled 247,000 vehicles this week, including some models of the Toyota Corolla, Matrix, Sequoia and Tundra, manufactured from 2001 to 2004.
Meanwhile Honda has called back 6 million vehicles with air bag problems in nine recalls since 2008. The automaker owns 1.2% of Takata, and is also its biggest customer.
Takata air bags have led to the recall of at least 4.7 million vehicles in the U.S. over the past two years, from manufacturers including Nissan Motor Co Ltd (ADR) (OTCMKTS:NSANY) (TYO:7201), Mazda Motor Corp (TYO:7261) (OTCMKTS:MZDAY), Bayerische Motoren Werke AG (ETR:BMW) and General Motors Company (NYSE:GM).
“This undermines the credibility or confidence in driving, generally, and in cars,” said Ashvin Chotai, managing director of researcher Intelligence Automotive Asia. “There’s very little consumers can do about it. Of course they feel less confident about sitting in a car and they’ll be extra cautious, but beyond that, what can you do?”
Air Bags recall impact on share prices
Decreasing consumer confidence has predictably led to a slide in share prices. Shares in Takata plummeted 23% in October 21 Tokyo trading, marking its biggest decline since the company listed in 2006, and adding to a $1 billion drop in market value this year.
Honda and Toyota fell by 1.5% and 1.6% respectively. Markets also saw a 2.2% decrease for Nissan and 1.6% for Mazda.
Concerned motorists can find out whether their car is subject to a recall by typing their registration number into the government-run website, www.safercar.gov.
