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Takata Airbag Recalls Force Honda To Revise Sales Targets

Honda Motor Company announced that it would revise its projected annual sales targets of 6 million vehicles due to the massive Takata airbag recalls. The company stated that it would reduce its sales targets, citing the drive to achieve prior sales goals that led inspectors to overlook potential safety hazards. Honda was the biggest customer for the airbags prior to the Takata airbag recalls, and had the most vehicles recalled due to the defective airbag inflation system.

Reasons Behind Takata Airbag Recalls

The Takata airbag recalls stemmed from reports of a defective inflation system that would cause the airbag assembly to explode when deployed. Laboratory tests showed that a chemical used in the inflation system could become volatile and lead to possible explosive reactions. At least six deaths, along with numerous injuries, have been blamed on flying metal and plastic shrapnel from Takata airbags. The reports led ten major automakers to issue nationwide Takata airbag recalls on vehicles carrying the faulty systems. Despite calls from both the U.S. Congress and federal auto safety agencies, Takata has still limited its recalls to areas with humid climates.

Honda Feels Effects of Takata Airbag Recalls

The Takata airbag recalls have forced Honda to cut its profit forecasts for the second time in the last two fiscal quarters. The company has also postponed its release of new models as it struggles to recover from the Takata airbag recalls. Honda CEO Takanobu Ito was forced to take a pay cut as the company projected that it would see a drop in profits for the first time in three years. Mr. Ito also announced that the company would not post a global sales goal in its next midterm plan.

Takata Airbag Recalls Latest Honda Issue

As a company, Honda faces many more issues than just the Takata airbag recalls. The company’s new line of hybrid vehicles have been recalled numerous times in the last two years. The Fit hybrid sedan has been recalled five times since its rollout in late 2013. Honda’s Vezel hybrid SUV crossover has been recalled three times in less than two years. Over the last 11 years, the company has failed to report more than 1,700 accidents resulting in death or serious injury, leading to a record fine of $70 million from the U.S. National Highway Transportation Safety Administration.

Source: Auto News

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