Takata recalls could shake trust in Japan auto industry, minister warns

Photo credit: REUTERS

UPDATED: 11/28/14 11:03 am ET - adds details

TOKYO -- Takata Corp.’s safety crisis linked to five fatal auto accidents threatens to shake confidence in Japanese manufacturing and the country's auto industry, the nation’s transport minister warned.

“We need to solve it as soon as possible and take appropriate actions,” Transport Minister Akihiro Ohta said Friday in Tokyo. “The good reputation Japanese makers have enjoyed could be shaken.”

The remarks are the most severe to date by Japan’s government on the recalls involving Takata’s airbags and show authorities are grasping the potential for a crisis involving the nation’s biggest manufacturers to damage its international standing. Honda Motor Co. and Toyota Motor Corp. have called back the most vehicles to replace devices that have ruptured and spewed metal shrapnel at motorists.

“The automotive sector is the heart of Japanese manufacturing, and they really have to protect the hard-earned reputation,” said Satoshi Yuzaki, general manager at Takagi Securities Co. in Tokyo. “It’s Takata’s slow reaction that’s doing more harm.”

Japan’s regulator is stepping up scrutiny of Takata after mounting pressure in the U.S., where four people have died from airbags that malfunctioned. The transport ministry said this week it formed a group to oversee the 2.6 million cars recalled in Japan to replace the devices, which haven’t been linked to any injuries or deaths in the country.

‘Deeply apologize’

“Although we haven’t confirmed the minister’s remarks, we deeply apologize for the troubles caused to all by our air-bag defects,” Takata spokesman Toyohiro Hishikawa said by e-mail. “We will exert all efforts to regain the trust.”

Japan will order Takata customers Honda and Mazda Motor Corp. to call back about 200,000 more vehicles in the country if recalls in the U.S. are expanded nationwide, Ohta said. The U.S. has demanded Takata and carmakers extend safety campaigns across the country by Dec. 2, after months of allowing companies to limit recalls to high-humidity regions.

The Japanese transport ministry’s group is meeting every morning and is in constant contact with the U.S. National Highway Traffic Safety Administration to collect information on recalls, Ohta said.

“The biggest question mark is nobody knows exactly how many more have to be recalled, and as a result, nobody knows what’s going to be the final damage,” said Koji Endo, an analyst at Advanced Research Japan. “Almost every week, we have an additional 100,000 or 50,000 recalls around the world.”

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