Nissan to pay S$1.3 billion settlement for Takata air bag malfunction

The Nissan settlement will cover 4.4 million vehicles, according to court filings. PHOTO: REUTERS

DETROIT (BLOOMBERG) - Nissan Motor and its US unit will pay almost US$98 million (S$1.3 billion) to settle economic-loss claims tied to Takata air bag recalls.

The agreement, filed in court on Tuesday, will provide for an accelerated replacement of recalled air bags and reimbursement for out-of-pocket costs.

The Nissan agreement follows a US$533 million settlement with four other automakers reached in May. That agreement with Toyota Motor., Subaru, Mazda Motor and BMW won preliminary court approval in June.

The massive Takata air bag recalls, the largest in history, led to the company filing for bankruptcy in June and spurred lawsuits by consumers and accident victims.

The air bags can malfunction, sending shards of metal at drivers and passengers, and are linked to at least 17 deaths worldwide.

The consumers sued the carmakers and Takata claiming they incurred economic losses, including costs of renting vehicles, while waiting for air bags to be replaced. They also said the carmakers and Takata were not recalling and replacing defective air bags quickly enough.

The Nissan settlement will cover 4.4 million vehicles, according to court filings.

The agreement, which requires court approval, does not cover claims of personal injury or property damage.

The settlement provides an independent outreach programme that will regularly contact Nissan customers about the recalls and settlement benefits through mail, e-mail, phone calls, Internet calls and social media.

The programmes in the settlement "are intended to significantly increase customer outreach and to accelerate recall remedy completion rates", Mr Steve Yeager, a spokesman for Nissan North America, said in an e-mailed statement.

The settlement "does not constitute any admission of liability or fault by Nissan Group". Consumer claims are pending against two other automakers, Honda Motor and Ford Motor.

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