Toyota share price down, expands Takata-related recalls by 5 million

Japanese carmaker Toyota Motor Corp announced on Wednesday it will recall just under 5 million vehicles due to risk of moisture intrusion on certain types of air bags produced by Takata Corp.

The worlds biggest auto manufacturer said it will initiate both a new recall and expand the production period of existing recalls, withdrawing approximately 4 999 000 vehicles across 35 different models produced between March 2003 and November 2007. No accidents or injuries have been tied to the potentially faulty airbag inflators, a company spokeswoman said, adding that the recall was for investigative purposes.

“Among the parts collected from the Japanese market, certain types of air-bag inflaters were found to have a potential for moisture intrusion over time,” Toyota said in a statement. “As a result, they could be susceptible to abnormal deployment in a crash.”

Separately, smaller Japanese rival Nissan Motor Co. said it will recall 1.56 million vehicles worldwide over the same issue. It did not provide details on the models affected but said the cars were produced between 2004 and 2007.

This brings the total count of Takata-related recalls by more than 10 carmakers to almost 31 million since 2008. Six deaths have been linked to air-bag explosions, all in cars made by Honda Motor Co, Takatas biggest customer. The car maker said it was preparing to launch additional recalls as well, without providing any further details.

Takatas air bag inflators are susceptible to absorbing moisture, experts state, which in turn can cause damage and lead to an explosion of the metal casing upon deploying the air bag. Toyota, however, said that the relationship between moisture intrusion and a rupturing of the inflators remains uncertain.

Toyota plans to replace air bag inflators on the drivers side with ones made by Daicel Corp, while passenger side air bags will be refitted with newly manufactured Takata inflators. Nissan also reported it has found a similar flaw on a passenger-side air bag.

A Takata spokeswoman said a probe into the causes of the defects was ongoing and that the company is fully cooperating with the auto manufacturers. Honda is also investigating the issue with engineering firm Exponent, while US and Japanese safety regulators have launched a separate probe. The air bag maker faces multiple class action lawsuits in the US and Canada.

It said it hopes to return to profit in the current fiscal year after a 29.6-billion-yen net loss for the business year ended March 31st 2015. Shares of the company slid 1.6% on Wednesday in Tokyo to 1 602 yen.

Toyota Motor Corp settled 1.06% lower at 8 196 yen per share, marking a one-year increase of 45.06%. The auto maker is valued at 28.30 trillion yen. According to the Financial Times, the 26 analysts offering 12-month price targets for Toyota Motor Corp have a median target of 9 100 yen, with a high estimate of 10 500 yen and a low estimate of 7 800 yen. The median estimate represents an 11.03% increase from the last price.