Tag Archive | "Toyota"

Takata Air Bag Recall Expands to Record 34 Million Vehicles


As part of an agreement with Takata, federal regulators expanded the recall of vehicles equipped with the company’s air bags to 33.8 million in the U.S., making it the largest safety recall in the nation’s history, reports Detroit Free Press.

The move essentially doubles the number of vehicles being recalled to replace potentially lethal air bags made by the Japanese supplier. At least six people have died and more than 100 have been injured from shards of metal from exploding air bags.

Takata, for its part, officially acknowledged the defects for the first time on Tuesday, even though 17 million vehicles with its air bags already have been recalled.

Mark Rosekind, recently appointed administrator of the National Highway Traffic Safety Administration, said no one knows how long it could take to fix the vehicles, but “it could take some years. … We intend to make sure at the end of this process there is a safe airbag in every vehicle.”

The NHTSA recall now involves 11 automakers, including the Detroit Three, most affecting 2002 through 2008 model years. Takata is partly owned by Honda, which has the highest percentage of recalled vehicles. The total number could change as automakers sift through the specs of all of their models to determine which ones contain any of the four defective inflators, which activate the air bags in a collision.

Many consumers will have to drive their vehicles for a long time before the parts are available to fix them, with the industry unable to manufacture replacement bags fast enough. They could also be waiting months for the notification their vehicle is subject to recall because automakers must prioritize vehicles at most risk based on their age and geographic location

The announcement is the second example in as many days of Rosekind cracking down on automakers to address safety on U.S. roads. On Monday, Rosekind announced he has scheduled a hearing in July for Fiat Chrysler Automobiles to explain their slow response in completing repairs in 20 different recalls.

NHTSA has been pushing for Takata to expand its air bag recall. Automakers had recalled about 17 million vehicles, many of them from Honda. The latest move largely makes this a national recall of vehicles from 11 automakers with vehicles that potentially have faulty inflators in the driver or passenger-side air bag.

“Up until now Takata has refused to acknowledge that their airbags are defective, that changes today,” said U.S. Treasury Secretary Anthony Foxx. “Takata has agreed to declare their air bag inflators are defective.”

Takata Chairman Shigehisa Takada, in a statement, said, “We are pleased to have reached this agreement with NHTSA, which presents a clear path forward to advancing safety and restoring the trust of automakers and the driving public.”

The supplier has also agreed to enter into a consent order with NHTSA to supply all related documents and information about the defective airbags and pledged full cooperation going forward.

In return, NHTSA has suspended more than $1 million in accumulated fines — $14,000 per day since February — for not responding to all NHTSA’s inquiries. The agency has not ruled out more fines in the future and there could be further civil penalties.

Initially the exploding air bags were considered a problem only in hot and humid climates but the recall has been expanded nationally as Takata and affected automakers continue to try to identify the root cause of the problem so they can fix it.

The recall has also expanded to cover both driver and passenger side air bags in more vehicles and regions.

Automakers with affected vehicles include Honda, Toyota, Ford, BMW, Fiat Chrysler Automobiles, General Motors, Mazda, Mitsubishi, Nissan, Subaru and the newly added Daimler Trucks. The automakers formed a coalition and hired independent engineering firm Orbital ATK to try to find the cause of the exploding air bags. Their investigation is in addition to those being conducted by NHTSA and Takata in an industry-wide effort to find the reason for the defect to make sure it is fixed properly.

NHTSA also is opening its own testing program to focus on ensuring the remedy is completely safe. Rosekind said while the replacement air bags are safer than the ones they replace, he cannot guarantee their long-term safety at this time.

“We are doing our best to keep focused on the investigation,” said former NHTSA Administrator David Kelly who was hired to oversee the investigation by the automakers. Efforts to determine the root cause are still in the early stages of testing, he said.

Safety officials warn consumers to keep checking their vehicle VIN number on the www.safercar.gov website because even some of the vehicles previously fixed – or excluded in the past — could be back on the recall list in the future.

Consumer who receive recall notices should call their dealer immediately.

“Folks shouldn’t have to drive around wondering if their airbag is going to explode in their face or if their car is going to be on another recall list,” said U.S. Sen. Bill Nelson, D-Fla., the top Democrat on the Senate Commerce Committee and a key figure in a congressional probe into the defective airbags. “We’ve seen the recall list double now to 30 million cars. Let’s hope Takata’s admissions today tells us the whole story.”

Rich Newsome, an attorney representing seven victims of faulty Takata air bags, including Corey Burdick, a Florida man disfigured and blinded in one eye by shrapnel from an exploding air bag in May, called it a victory for consumer protection.

But, he said, “today’s expanded recall is already too little, too late for people injured and their families. Hopefully today’s news will push the agenda for recall reform to the forefront and result in legislation that will help NHTSA identify these kinds of defects before regular families with defective cars are needlessly harmed in the future.”

Automakers say they will continue to work with NHTSA and share test results. Honda said many of the recalls announced Monday already were included in previous safety campaigns and the automaker is “reviewing the information released (Monday) to determine what new actions may be required.”

Honda owners can check their recall status at www.recalls.honda.com or call 800-999-1009. Acura owners should go to www.recalls.acura.com or call 800-382-2238 and press option 4.

“A recall of this scope illustrates the potential for massive automaker expense and consumer inconvenience when a common, mass-produced part is defective,” said Karl Brauer, analyst with Kelley Blue Book.

“While this is the largest consumer recall in history it’s likely we’ll see future vehicle recalls of similar, if not larger, size as the automotive industry becomes more globalized.” Brauer said.

Takata boosted production to 450,000 replacement kits per month in March, up from 350,000. Other suppliers are also ramping up capacity to meet the demand the recall has created as the industry works to address the problem collectively.

Autoliv, another global supplier of airbags, said Tuesday it could make more airbag inflators than it has already promised to the industry.

In January, Autoliv committed to providing several automakers with as many as 25 million airbag inflators and could begin delivering them later this year.

“Our focus has really been to help the industry and the customers in this situation and clearly if we would be asked to supply more we would work to do that as rapidly as we could,” said Thomas Jonsson, spokesman for Autoliv.

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Toyota, Honda Have Best Supplier Relations in U.S.


For the fifth straight year, Toyota Motor Corp (7203.T) and Honda Motor Co (7267.T) topped a study of automakers with U.S. plants in supplier relations, helping them get the best parts at the lowest cost, reported Reuters.

Toyota was the tops in supplier relations, followed closely by Honda. Ford Motor Co (F.N) was a distant third, followed by Nissan Motor Co (7201.T). General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCHA.MI) were tied for last place.

Those six are the largest automakers in the U.S. auto sales market and have the largest U.S. auto industry production footprints.

Lagging relations with suppliers means less profit, said the study’s author, John Henke, president of Planning Perspectives and a marketing professor at Oakland University near Detroit.

Toyota and Honda improved their scores by an average of 8.7 percent over the year, the study showed.

If the other four had improved their relations by as much they collectively would have added $2 billion in 2014 operating profit, Henke said.

GM would have earned another $750 million last year had its supplier relations improved 8.7 percent, the study found.

Suppliers have become more discerning about which companies they serve, said Henke, who has produced a study of relations of automakers and their Tier 1 suppliers for 15 years. A supplier will show its best new technology to the automaker that treats them best, he said.

Gone are the days when parts suppliers would build plants in order to take as much automaker business as they could get.

Suppliers “are not willing to put in the infrastructure to support all the business they could possibly get today because they don’t know what’s going to happen tomorrow,” said Henke.

The 2008-2009 recession “spooked” suppliers away from investing for work that has not been contracted yet, and the best of them became highly efficient, Henke said.

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Toyota, Mazda in Talks on Expanding Partnership


Toyota Motor Corp and Mazda Motor Corp are in talks to expand their technology partnership to fuel-cell vehicles (FCVs), sources said on Saturday, as global automakers face rising costs to comply with stricter emission regulations, reported Reuters.

The two Japanese automakers already have a technology and production tie-up, and Toyota was now considering providing fuel-cell and plug-in-hybrid technology to Mazda, said the two sources, who were not authorized to discuss the matter publicly.

Mazda, in return, was considering offering its partner fuel-efficient gasoline and diesel engine technology under its proprietary SkyActiv series, the sources said.

Mazda has been trying to develop FCVs on its own, but it has decided to team up with Toyota, which produces the Mirai, the world’s only mass-market fuel-cell car, the sources said.

Toyota has said hydrogen FCVs offer the most promising zero-emission alternative to conventional cars since they have a similar driving range and refueling time.

Toyota has already decided to share some of its patents concerning fuel cell technology for free, hoping this will speed up the development of the infrastructure.

The Nikkei business daily reported the two companies intended to reach an agreement on the partnership soon.

Toyota and Mazda officials said nothing has been decided.

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Toyota Flags Third Year of Record Profit on Strong U.S. Sales, Cost Cuts


Toyota Motor Corp said it will crank net profit up to a third straight record this year as cost cuts and rising U.S. sales offset weaker business elsewhere, building on bumper earnings last year powered largely by foreign-exchange gains, reported Reuters.

Reporting net income jumped 50 percent in the quarter ended March, the world’s top-selling automaker said on Friday it expects net profit to rise 3.5 percent to 2.25 trillion yen ($18.75 billion) in the year that began in April.

The forecast assumes the dollar will be worth 115 yen on average this year. That’s conservative compared with 120 yen currently, implying Toyota’s net profit for the year may yet come closer to the 2.44 trillion yen average estimate of 27 analysts polled by Thomson Reuters.

For the past few years, President Akio Toyoda has called an “intentional pause” for the company founded by his grandfather. The strategy seeks to ensure sales growth stays at a sustainable pace, free of the overcapacity and quality problems that plagued the company in previous years.

“I think we are at a stage where we can move on to putting into practice what we have been preparing during the intentional pause,” Toyoda said at a news conference in the capital.

Toyota is looking to overhaul the way it designs and manufactures cars under a new initiative called Toyota New Global Architecture (TNGA), which aims to slash development and production costs and allocate part of the savings to making its cars more appealing. Advanced safety devices would be among features it plans to add to cars.

The first car developed under TNGA specifications – widely expected to be the next-generation model of the Prius sedan – is due for launch later this year. The first full-scale “simple and slim” TNGA factory will be built in Mexico in 2019.

The forecast for earnings growth this year came as Toyota projected overall vehicle sales will drop 0.8 percent to 8.90 million. But it expects lucrative sales in North America to grow 4.2 percent to 2.83 million, cushioning the blow of weaker sales in Asia, as well as Russia and the Middle East, which have been hit by falling oil prices.

Toyota expects operating profit to edge up 1.8 percent this year to 2.80 trillion yen, giving an operating margin of 10.2 percent – among the highest in the industry.

It expects cost cuts to contribute 265 billion yen, while currency losses will knock off 45 billion yen as a weaker Brazilian real and Russian rouble offset windfalls from a stronger dollar, which boosts the value of U.S.-based earnings when converted back into yen.

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Honda Hires U.S. Engineering Firm Exponent to Probe Takata Air Bags


Honda Motor Co has hired Exponent, a U.S.-based engineering consulting company enlisted by Toyota Motor Corp during its recall crisis in 2010, to investigate the cause of ruptures in some air bags made by Takata Corp, reported Reuters.

The hiring of Exponent was first reported by Japan’s Jiji News on Monday and confirmed by a Honda spokesman in Tokyo.

A consortium of 10 automakers led by Toyota Motor Corp and which includes Honda has separately commissioned engineering firm Orbital ATK to conduct independent testing of Takata’s air bag inflators, which can rupture with too much force, shooting metal shards into vehicles. Six deaths have been linked to the problem so far, all on Honda cars.

About 25 million vehicles with Takata air bags have been recalled worldwide since 2008.

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New Study Casts Doubt on Latest CFPB Allegations against Automaker Finance Arms


WASHINGTON – A new study by the research firm Charles River Associates (CRA) casts doubts on recent allegations made by the Consumer Financial Protection Bureau (CFPB) against Toyota Motor Credit Corp. and American Honda Finance Corp. concerning disparate impact in the pricing of auto loans, reported the NADA.

Among the CRA study’s key findings was that, when measuring whether such unintentional discrimination has occurred, the CFPB overestimates the number of minority consumers by as much as 41 percent and the pricing differences between minority and non-minority consumers by as much as 87 percent.

CRA noted that several factors (which appear to be completely ignored by the CFPB) further account for pricing differences which are completely unrelated to a consumer’s background.

CRA also noted that while the CFPB’s own study into its testing methodology reveals a significant overestimation of minority populations, the CFPB still does not explain whether or how it corrects for this flaw. Such failings can produce significant distortions and inaccuracies in the CFPB testing results, and should be fully explained by the CFPB before it relies upon them to support an allegation of discrimination.

The study examined the accuracy and reliability of the method used by the CFPB to test for unintentional disparate impact discrimination in an auto lender’s portfolio. After examining 8.2 million auto finance contracts, CRA concluded in its comprehensive report that the CFPB’s testing method is “subject to significant bias and estimation error.”

The CRA study was commissioned by the American Financial Services Association and released on November 19. The allegations made against the automakers’ captive finance companies were publically disclosed on November 25 and December 2, respectively.

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