Daimler is one of the biggest names in automobile and it has revealed that it is all set to recall 840,000 U.S. vehicles with Takata airbag inflators that could be defective, resulting in a charge of 340 million euros ($383 million) for the German automaker. This was decided late on Tuesday but the models which are to be recalled is not yet disclosed. However it is said that the 840,000 vehicles includes 705,000 Mercedes-Benz cars and about 136,000 Daimler vans.
Daimler said it would account for the cost by revising its 2015 financial results published last week, lowering the net profit to 8.7 billion euros and group earnings before interest and tax (EBIT) to 13.2 billion euros, from 8.9 billion and 13.5 billion euros respectively.
“This (340 million euros) is quite a big shortfall but the main message is that the current financial year will not be affected,” said Frankfurt-based Bankhaus Metzler analyst Juergen Pieper who keeps his “buy” recommendation on Daimler’s stock.
Last month Takata Corp said it was declaring 5.1 million additional inflators defective after new testing, following the death of a driver in December,2006 after an airbag rupture.
Takata’s inflators can explode with too much force and spray metal shrapnel into vehicle passenger compartments. They are linked to at least 10 deaths worldwide and more than 100 U.S. injuries. To date 14 automakers have recalled a total of about 24 million U.S. vehicles involving about 28 million Takata air bag inflators.
In December the U.S. National Highway Traffic Safety Administration named a former Justice Department official as a monitor to help regulators supervise one of the biggest and most complex safety recalls ever undertaken in the U.S. automotive industry.
Following this, it is to be noted that in November the U.S. regulators have fined Takata of $70 million and is still undergoing an investigation by the Justice Department. Additionally in December the U.S. National Highway Traffic Safety Administration named a former Justice Department official as a monitor to help regulators supervise one of the biggest and most complex safety recalls ever undertaken in the U.S. automotive industry. So now its time for Daimler owners to have a check of their airbags as a safety measure.