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Toyota Motor Corporation (TM) - free report >>
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Toyota Motor Corporation (TM) - free report >>
Autoliv, Inc. (ALV) - free report >>
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Autoliv to Incur Cost to Replace Airbags in Toyota Cars
Autoliv, Inc. (ALV - Free Report) will incur a cost of around $10−$40 million, net of expected insurance recoveries, for cooperating with Toyota Motor Corporation (TM - Free Report) in the recall of 1.43 million cars worldwide. Toyota announced a worldwide recall of 1.43 million vehicles with defective airbags that had been produced by Autoliv.
The vehicles recalled mainly include the Prius hybrid, Prius plug-in and the Lexus CT200h manufactured during Oct 2008 to Apr 2012. Of the total number of vehicles recalled, 743,000 vehicles are from Japan, 495,000 from North America and 141,000 vehicles from Europe, along with 9,000 vehicles from China, and 46,000 from other regions.
According to Toyota, a small crack in some of the inflators in the airbags in the driver and passenger sides may expand. This may cause the airbags to partially inflate, thereby increasing the risk of injury.
Seven cases involving the Toyota Prius have been identified in which the side curtain airbag partially inflated without any deployment signal from the airbag controller. Also, in all these cases, the vehicles were parked, with no occupants.
Toyota confirmed that it has not received any reports of casualties related to the defect. Autoliv focuses on ensuring the safety and quality of its products. Thus, it will fully support Toyota in resolving the issue and arriving at a solution.
It was suspected that the manufacturing process for the inflator was responsible for the problem. However, the process was changed in Jan 2012. The recall by Toyota covers almost half of the inflators produced through Jan 2012.
AUTOLIV INC Price
AUTOLIV INC Price | AUTOLIV INC Quote
Autoliv currently carries a Zacks Rank #3 (Hold) while Toyota carries a Zacks Rank #5 (Strong Sell).
Stocks that Warrant a Look
Some better-ranked automobile stocks include Commercial Vehicle Group Inc. (CVGI - Free Report) and Visteon Corporation (VC - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).
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