According to a story published on the topic by Market Watch, ” Honda Motor Co. swung to a quarterly loss as ballooning costs related to Takata Corp. -made air-bag recalls outweighed strong vehicle sales in the USA and China.
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Tokyo-based Honda reported an Y81.9 billion profit in the same quarter of 2015.
Honda said Friday, May 13, it would recall millions more cars equipped with airbags made by crisis-hit supplier Takata, in a widening of a scandal that has already led to the biggest auto recall in U.S. history.
The airbag problems saw Honda plunge to a 93.4bn yen (£600m) net loss for the fourth quarter to the end of March, compared to an 81.9bn yen (£520m) net profit for the same period a year ago.
Subaru’s Fuji Heavy has set aside Yen30 billion to cover possible costs tied to the recalls this financial year and expects to spend around Yen90 billion in total over the next three financial years.
The lawsuit says Takata decided years ago to switch to ammonium nitrate to inflate its airbags since it’s less expensive.
The yen has strengthened more than 10 percent this year, weighing on the repatriated value of profit earned overseas.
The weak yen works as a plus for Japanese exporters such as Honda, but the currency has been strengthening lately.
He says Honda is cooperating with the government on the Takata airbag inflator issue. “But compared to Honda’s fiscal 2014 results, its outlook is not that great because of a negative impact of a stronger yen”.
Local media said Honda would recall an additional 20-million Takata-made airbags globally but a Honda spokesman denied the reports.
The recall, one of the largest in history, has impacted dozens of automakers, but Honda has taken the biggest hit. However, Honda’s troubles are going to deepen even further, as it plans to add another 21 million cars to the campaign, according to a report from The New York Times.
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We have been keeping you informed about a recall which is effecting millions of people across the USA including some of us here in the panhandle.
