Honda posts surprise loss on back of product recalls

Honda yesterday posted a surprise net loss for its fourth quarter as its quality-related costs, mostly to recall Takata-made air bag inflators, nearly quadrupled for the full business year.

For the three months to the end of March, Japan’s third-largest automaker posted a net loss of 93.4bn yen (€755m), compared to the profit of 115.35bn yen expected by analysts.

Honda said its full-year results absorbed the impact of roughly 267bn yen more in quality-related costs than its original estimate after the US Transportation Department ordered an expansion of recalls to replace potentially deadly air bag parts made by Takata.