Volkswagen, partners to recall 4.86 million vehicles in China over Takata airbags

Volkswagen delivered 3.98 million vehicles in China last year. (Reuters)
Updated 14 September 2017
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Volkswagen, partners to recall 4.86 million vehicles in China over Takata airbags

BEIJING/SHANGHAI: Volkswagen and its Chinese joint ventures FAW-Volkswagen and SAIC Volkswagen will recall 4.86 million vehicles in China due to potential issues with Takata Corp. air bags, a blow to the carmaker in the world’s largest auto market.
The recall comes after Chinese watchdogs asked the German automaker as well as General Motors and Daimler’s Mercedes-Benz to recall vehicles with Takata air bags earlier this year.
Official Chinese estimates show over 20 million cars in China had air bags made by Takata, which have been linked to at least 16 deaths and 180 injuries globally. The air bags have the potential to explode with too much force and spray shrapnel.
The defect led to the biggest recall in automotive history and eventual bankruptcy of the Japanese maker.
Volkswagen told Reuters in an e-mailed statement on Thursday 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”.
“Acting upon advice from the Chinese safety authority, Volkswagen Group China therefore made this recall decision.”
The carmaker said it had not received any reports related to the issue affecting its vehicles globally, and that a parts analysis had found Takata air bag inflators – the suspected cause of the defect – were in “normal condition”.
China’s General Administration of Quality Supervision, Inspection and Quarantine said in a statement that VW China would recall 103,573 vehicles, FAW-Volkswagen 2.35 million vehicles and SAIC Volkswagen 2.4 million vehicles.
The watchdog said the recall would run from March next year into 2019.
Volkswagen said the carmaker and its Chinese partners would provide free air bag replacements on the recalled cars.
Volkswagen, which also owns the high-end Audi brand, is not the only carmaker hit by recalls in China related to Takata air bags.
As of the end of June this year, 24 out of 37 affected automakers had recalled 10.59 million vehicles. A further five had made plans to recall 1.26 million vehicles.
Volkswagen delivered 3.98 million vehicles in China last year, an increase of 12.2 percent on 2015, making it the biggest foreign automaker in the country.


Oil prices fall for second day on oversupply concerns

Updated 15 min 58 sec ago
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Oil prices fall for second day on oversupply concerns

  • Goldman Sachs on Monday said it expects price volatility in oil markets to remain elevated
  • US oil output from seven major shale formations is expected to rise by 143,000 bpd to a record 7.47 million bpd in August

TOKYO: Oil prices fell for a second day on Tuesday as worries about possible disruptions to supply eased and as investors focused on potential damage to global growth from the festering Sino-US trade spat.
Brent crude futures fell 32 cents, or 0.5 percent, to $71.52 a barrel by 0638 GMT to the lowest since April 17. They fell 4.6 percent on Monday.
US West Texas Intermediate futures were down 31 cents, or 0.5 percent, at $67.75 a barrel. They declined 4.2 percent on Monday.
“It is growth fears all around and more about concerns that ... trade worries will come back and bite,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“(Oil trading) volumes are abysmal and there is very little commitment at current levels.”
China is still confident of hitting its economic growth target of around 6.5 percent this year despite views that it faces a bumpy second-half as a trade row with the United States intensifies, the state planning agency said on Tuesday.
The remarks came a day after China reported slightly slower growth for the second quarter and the weakest expansion in factory activity in June in two years, suggesting a further softening in business conditions in coming months as trade pressures build.
Goldman Sachs on Monday said it expects price volatility in oil markets to remain elevated, keeping Brent crude in a $70 to $80 per barrel range in the short-term.
“Supply shifts, alongside the ongoing surge in Saudi production, create the risk that the oil market moves into surplus” in the third quarter, the report said.
Meanwhile, an oil worker strike in Norway intensified on Monday when hundreds more walked out in a dispute over pay and pensions after employers failed to respond to union demands for a new offer.
The strike, which began last Tuesday, has had a limited impact on Norway’s oil production so far, but some drillers warned of possible contract cancelations if the dispute goes on for a month or more.
While Libyan ports are reopening, output at the country’s Sharara oilfield was expected to fall by at least 160,000 barrels per day (bpd) after two workers were abducted by an unknown group, the National Oil Corporation said on Saturday.
US oil output from seven major shale formations is expected to rise by 143,000 bpd to a record 7.47 million bpd in August, the US Energy Information Administration said in a monthly report on Monday.
Production is expected to climb in all seven formations, with the largest gain of 73,000 bpd seen in the Permian Basin of Texas and New Mexico. All shale regions except for Appalachia are at a high, according to the data.