Takata Air Bag Problem Could Tarnish Image of Japanese Vehicles

Tokyo, Dec. 4 (Jiji Press)--Japanese automakers are increasingly concerned that the brand image of their vehicles could be tarnished after major auto parts maker Takata Corp. <7312> rejected U.S. regulators' demand that the company expand its air bag recall to cover the whole of the United States. As criticism of Takata is growing in the United States, the problem of faulty Takata air bags could slow sales of Japanese automobiles in the U.S. market. Takata rejected U.S.-wide recalls at Wednesday's hearing at the U.S. House of Representatives. The recall problem has come at a time when Japanese automakers are enjoying strong sales in the U.S. market, which has been recovering sharply from the slump following the collapse of U.S. investment bank Lehman Brothers in 2008. Their brisk U.S. performances are more than offsetting weak sales in emerging countries with decelerating economic growth, and in Japan, where demand has been sluggish following the consumption tax hike in April. The automakers are worried that their earnings could be hit hard if U.S. consumers shun Japanese vehicles over the air bag problem, industry sources said. At the House hearing, Honda Motor Co. <7267>, the largest customer of Takata air bags, unveiled plans to expand its vehicle recalls in the United States to all areas of the country. Honda has so far conducted recalls related to Takata air bags only in southern U.S. states with high humidity where the risk of air bag ruptures is high. The number of Honda vehicles subject to the recall will increase to about six million units from 2.8 million units. Honda is in talks for procuring replacement parts from such companies as major Swedish air bag maker Autoliv Inc. because supply from Takata could be limited. But it would take about six months before supply from these companies start. When Toyota Motor Corp. <7203> conducted massive vehicle recalls in the United States between 2009 and 2010 due to unintended acceleration, its sales in the country were affected to a certain degree although the safety of Toyota vehicles was eventually confirmed. In response to the Takata air bag problem, Toyota has called for the establishment of an industry-wide body to investigate the matter, apparently in an effort to prevent the issue from starting to deeply impact sales. When Toyota was hit by its recall problem, its president, Akio Toyoda, a member of the company's founding family, fully explained the matter at U.S. congressional hearings. This time, however, Takata Chairman Shigehisa Takada, a member of the founding family of the air bag maker, has not spoken about the firm's products in a public place since the problem erupted. At a press conference late last month, Japanese transport minister Akihiro Ota said that the air bag recall problem could undermine the high reputation of Japanese makers. END