It was back in January 2016 that we learned Takata was hoping to receive financial aid from automakers as it struggled to get through its air bag debacle.
According to Bloomberg, Takata detailed its business outlook at a meeting in January, and hoped to gauge how automakers may react to its request for financial aid. Both Nissan and Honda stated that they had been called to the meeting in January, but didn’t give further details.
In February 2016, the Wall Street Journal reported that Honda had no interest in helping Takata financially. The automaker’s chief executive officer told reporters at that time that Takata needed to figure out on its own how to fulfill its duties.
He added, however, that many companies would be in trouble if Takata stopped supplying replacement air bag inflators, which are currently being installed in place of defective inflators that can explode upon deployment.
Now, according to AutoNews, Honda plans to extend financial aid, but not directly to Takata. Instead, Honda will be helping its own dealerships that are suffering financially because of air bag recalls.
Vehicles Can’t Be Sold Until Air Bags Are Repaired
Over 24 million vehicles are under Takata air bag recalls. Some of those have been repaired, but many are still awaiting inflator replacements, as Takata and automakers struggle to meet the demand.
Dealerships have taken a significant financial hit because of the defective airbags. There are many vehicles sitting on lots that cannot be sold because they are awaiting recall repairs. According to the law, new vehicles under recall must be repaired before they can be sold to consumers. The same law does not apply to used vehicles, but Honda has stepped in to be sure that used vehicles under recall are repaired before ending up in consumers’ hands.
Honda issued a stop-sale on 1.7 million new and used vehicles in January 2016, to make sure these vehicles were not sold to customers until the air bags were fixed. The recalls may also affect leased vehicles, which cannot be bought until repairs are completed, and trade-ins, as well.
The fact that many dealerships are still awaiting parts means that many of these vehicles will be sitting for awhile. Honda recently issued a notice to dealers stating that estimated replacement parts would be delayed until summertime.
Starting in March 2016, Honda plans to compensate both Honda and Acura dealers for these vehicles that can’t currently be sold (and are depreciating in value as they wait). They also plan to extend financial assistance “to defray floor planning costs incurred from the temporary suspension of vehicle sales at Honda and Acura dealers,” AutoNews states.
Honda Hardest Hit By Takata Air Bag Defects
So far, at least 10 deaths and over 100 injuries have been linked to faulty Takata air bags. Honda has been the hardest hit by the recalls, as they purchased more air bags from Takata than any other company. Honda have since stated that it will not be using Takata as its air bag supplier in the future.