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Japan automaker Subaru cuts profit forecast on mounting Takata recall costs
[TOKYO] Subaru slashed its full-year profit forecast by a fifth as the Japanese automaker expects to book a special loss stemming from higher costs linked to the global recall of airbag inflators made by Takata, which has filed for bankruptcy.
The maker of the Forester and Outback models said it sees a special loss of 81.3 billion yen (S$1.013 billion) and now expects full-year net profit to come in at 228.5 billion yen, down from a previous forecast for 285.0 billion yen and lower than last year's 282.4 billion yen.
In May, Subaru said that as of March, it had accrued expenses of around 73.5 billion yen related to the recall of Takata inflators.
Based on global recalls announced so far, Subaru now expects recall-related costs to total 154.8 billion yen, covering around 4.7 million inflators installed in its cars which have been or may be slated for recall.
"As a result (of Takata's bankruptcy protection filings) the company expects that in principle it will be unable to make any claims for compensation against Takata Corporation and TK Holdings," Subaru said in a statement on Friday.
Analysts have estimated industry-wide costs to recall the defective inflators at around US$10 billion.
Automakers have paid much of these costs so far, while they also face inflator liability claims from customers.
Takata, which is at the centre of the auto industry's biggest-ever product recall, filed for bankruptcy protection in the United States and Japan in June, and said it had agreed for most of its operations to be acquired for US$1.6 billion by the Chinese-owned US-based Key Safety Systems.
Its air bag inflators have been linked to at least 18 deaths and 180 injuries around the world because they can rupture and send metal fragments flying. REUTERS