Stocks in Japan’s biggest auto makers continue to be unscathed by growing recalls related to Takata-made airbags.
Over the past year Toyota and Nissan stock have each risen about 40 per cent, while Takata’s market value has dropped 27.5 per cent. The trend continued on Thursday morning even after Toyota and Nissan, Japan’s two biggest carmakers, said they were dramatically expanding their recalls to replace potentially faulty airbags made by Takata, deepening a safety crisis that will now affect more than 30m vehicles worldwide.
The numbers dribbled out gradually on Wednesday afternoon but eventually it was revealed that together they will recall another 6.6m vehicles globally. Honda, the third biggest carmaker, said it was considering taking similar action.
The news deepens the sense of crisis for Takata, a Tokyo-based manufacturer, which has also been strongly criticised by US regulators for its response to the safety crisis. In February, US regulators warned they would impose a daily fine of $14,000 on Takata over its failure to co-operate fully with investigations into product faults — although the Japanese company said it was assisting watchdogs with their inquiries.
For the year to March 2016, the company is expecting a net profit of Y20bn, compared with a loss of Y29.56bn in the previous 12 months – but company officials said the forecast does not take into account further potential recall-related costs. Since the beginning of 2014, shares in Takata have fallen by 53 per cent.
Separately, Nissan also announced its full-year results late on Wednesday, in which it reported a net profit of Y457.6bn for the year to March 2015, up 17.6 per cent compared with the previous 12 months.
The group also scored political brownie points with a pledge to restore domestic Japanese car production to more than 1m vehicles in 2016-17, on the back of a weaker yen. It also benefited from a resurgent car market in the US, a region where Japanese carmakers have traditionally performed extremely well. However Carlos Ghosn, chief executive, also warned that competition was “much tougher” in China – now the second most important market for the sector.
Today’s share moves:
Takata shares are down as much as 5.1 per cent.
Nissan rose as much as 4.3 per cent.
Toyota fell 0.4 per cent.
In the chart below, Takata’s tumbling shares are contrasted with the steady move upward in the Topix-17 Automobiles & Transportation Equipment Index, which comprises 17 Japanese companies in the sector (including Takata).