TOKYO (Bloomberg) -- Takata Corp. shares plunged by a record in Tokyo trading after Toyota Motor Corp. advised U.S. owners of its cars to seat passengers in the back amid reports of metal shrapnel being propelled from inside faulty airbags.
The airbag supplier's shares fell 23 percent, the biggest drop since the company’s 2006 listing, to 1,686 yen ($15.77) at the 3 p.m. close. Takata shares have declined 44 percent this year, compared with the 7 percent slide in Japan’s benchmark Topix index.
Takata is at the center of an escalating global recall of faulty airbags that has resulted in Honda Motor Co., its largest customer, calling back more than 6 million vehicles since 2008. Toyota, Honda, Nissan Motor Co., BMW AG, Ford Motor Co. and Chrysler Group have also recalled cars with Takata airbags.
“I don’t think the worst is over,” said Koji Endo, an auto analyst at Advanced Research Japan in Tokyo. “There may be more recalls and there’s a reasonable chance that Takata may lose some business in the future.”
Toyota’s warning comes amid a renewed effort by the government to reach at least 4.7 million motorists driving with potentially faulty airbags. The carmaker yesterday added to the recalls, which have covered multiple car brands, including Buick and Chevrolet.
Honda hasn’t decided yet whether to issue warnings against sitting in front passenger seats, Chris Martin, a spokesman for the Tokyo-based carmaker, said today. Chris Keeffe, a spokesman for Nissan, said the company couldn’t immediately comment about whether it will make any changes to its U.S. recall strategy.
The U.S. National Highway Traffic Safety Administration is conducting an industrywide investigation of airbags that may deploy with too much force, causing metal fragments to kill or injure vehicle occupants. The vehicle safety watchdog called for an urgent response by carmakers, given flawed airbags have been potentially linked to four deaths.
“We take the NHTSA’s warning seriously and we will corporate with carmakers closely to do the recall and replace the parts as soon as possible,” Kikko Takai, a Takata spokeswoman, said by phone.
Recalls are getting extra scrutiny in the U.S. after General Motors Co. told NHTSA in February it had delayed action for more than a decade on a vehicle defect that so far has been linked to 27 deaths.
After congressional hearings and an internal investigation, GM fired 15 employees and has agreed to work with regulators to ensure better compliance. Automakers in the U.S. have recalled a record 51.8 million vehicles this year.
Toyota this month made its fourth global recall involving more than a million vehicles this year, operating with stricter supervision of safety from U.S. regulators. The carmaker is calling back 1.75 million vehicles, including 759,000 Toyota and Lexus sedans to repair fuel pipes that could leak and raise fire risks.
Honda has said it’s examining whether a faulty airbag was to blame for the death last year of a man who crashed his Acura sedan in a California parking lot. The automaker has acknowledged two previous deaths from the airbags, which can deploy with excessive force in some conditions.
The Florida Highway Patrol said Friday, Oct. 17, it’s investigating the death of a Honda Accord driver that was initially examined as a homicide because of deep cuts to the victim’s neck weren’t consistent with crash injuries.
Takata in July set up a division directly overseen by the company’s president, Stefan Stocker, to ensure product quality.
This year’s recalls followed a 3 million vehicle callback by Toyota, Honda and Nissan last year, as Takata found it didn’t include all vehicles affected by the defective airbag inflators.
Takata expects a net loss of 24 billion yen ($226 million) for the 12 months ending March. The company had a 21.1 billion yen loss in the year ended March 2013, when it booked 30 billion yen in recall-related expenses.
After the recall last year, Takata replaced President Shigehisa Takada, grandson of the company’s founder, with Swiss national Stocker, the first foreigner in the post. Takada, 48, became the company’s chairman and CEO.