The Takata airbag crisis has spread to China where Volkswagen and its Chinese partners are recalling 4.86 million vehicles equipped with the supplier’s dangerous airbags.
Volkswagen and its Chinese joint ventures FAW-Volkswagen and SAIC Volkswagen implemented the action after Chinese regulators pushed the companies, as well as General Motors and Daimler AG, to recall vehicles with the airbags.
Volkswagen told Reuters that after discussions, Chinese authorities had concluded the fault could occur in rare cases when the air bag was deployed, “which may create a potential safety risk.” The company added that it acted upon “advice from the Chinese safety authority” in deciding to recall the vehicles.
Chinese officials estimate that approximately 20 million vehicles in China have the faulty airbags that are the root cause of the largest product recall in history. They are responsible for 18 deaths and more than 180 injuries.
(Bad week for those suing GM, Takata. For the story, Click Here.)
The airbags, under certain conditions, can explode with too much force sending pieces of metal shrapnel into the cabin of the vehicle, causing injury or death. The problem has resulted in more than 100 million recalls and drove Takata’s airbag business into bankruptcy.
Chinese authorities said the recall will run until March 2019.
In the U.S., more than 40 million vehicles, sold by dozens of different automotive brands, have been recalled, with still more expected to be added to the tally. Millions more vehicles have been called back overseas. Due to shortages of replacement parts, however, barely a third of the vehicles covered by those recalls have so far been repaired.
(For more on Takata’s bankruptcy and sale, Click Here.)
The settlement requires Takata pay $1 billion, much of that covering a portion of the costs its customers have incurred, along with a $25 million fine, while also setting up a $125 million compensation fund for victims and family members.
Takata has also been sued by a number of vehicle owners and survivors of those killed or injured due to the faulty airbags. And additional lawsuits by the states of Hawaii and New Mexico, as well as the U.S. Virgin Islands, were being heard in Judge Shannon court. The Judge has granted that 90-day stay which covers hundreds of lawsuits facing Takata while it moves ahead with a planned bankruptcy reorganization.
(Another 2.7 mil vehicles added to Takata recall list. Click Here to see why the list is likely to keep growing.)
Takata had sought a six-month delay while it prepares to sell most of its assets to Detroit-based, but Chinese-owned, Key Safety Systems, for $1.6 billion. The bankruptcy filing and sale were announced in June.