 "The logo of Honda Motor Co and an airbag logo are seen on a steering wheel of a car displayed at the company's showroom in Tokyo.")
Honda Motor Co said it was ditching air bag inflators made by Japan's Takata Corp, after the top US auto safety regulator on Tuesday fined the supplier $70 million and ordered it to stop using a potentially dangerous propellant.
Regulators have linked eight deaths - all in cars made by Takata's biggest air bag customer Honda - to the inflators, which use ammonium nitrate and can explode with too much force, spraying metal fragments inside vehicles.
In a harshly worded statement, Honda said it would no longer use Takata's inflators in front-seat air bags, adding that it was 'deeply troubled' by evidence suggesting Takata 'misrepresented and manipulated test data for certain air bag inflators'.
The automaker did not specify what alternatives it would use, but Honda is already buying more inflators from Takata rivals including Autoliv, TRW Automotive Inc and Daicel Corp.
In response to the US order, Takata said it would phase out ammonium nitrate in all its inflators by end-2018 even though it had not determined the root of the problem. Shares fell as much as 20% in Tokyo trade on Wednesday to their lowest in a year.
"Honda has taken a significant hit from this," said Christopher Richter, senior analyst at consultants CLSA. "If the maker can't figure out what the root cause is, can they afford the risk of continuing to use them as a supplier? For Honda, that's a no," he added.
In its statement, the US National Highway Traffic Safety Administration (NHTSA) accused Takata of providing "selective, incomplete or inaccurate data" from 2009.
The regulator also said it could demand an additional $130 million fine if Takata does not comply or new violations are found. A $200 million fine would make it the biggest ever NHTSA-imposed fine, overtaking the $130 million levied earlier this year on Fiat Chrysler Automobiles.
NO CONCRETE REASON
Takata has since 2013 been at the centre of a recall crisis linked to its airbag inflator.
Experts say the ammonium nitrate used as a propellant in the inflators could become unstable after being exposed to high humidity over a period of time, and some have suggested that auto design, including how well-sealed passenger compartments are against humidity, could also be a factor.
In Tokyo, Takata Chief Executive Shigehisa Takada said the company had yet to find out what caused the defect, but would comply with the NHTSA.
"We still think our product is safe, but we realise that there are many concerns from consumer, automakers and US regulators," he told reporters. The company would pay the $70 million fine in six instalments through October 2020.
The NHTSA cited ammonium nitrate as a factor in the fatal air-bag ruptures, and ordered carmakers to accelerate repairs on "high-risk" inflators, including those in humid areas.
US Transportation Secretary Anthony Foxx said millions of unrecalled vehicles could still be on the road with inflators that use the volatile chemical.
Nissan Motor Co said it would repeat a recall of eight models first issued in May in Japan after one of the vehicles initially cleared as safe was in an accident last week that caused the air bag inflator to rupture. A woman in the passenger seat was injured in the accident.
Toyota Motor Corp has also said it was testing inflators from Takata rivals.
