TOKYO: Japanese carmaker Honda said on Monday that its president was stepping down as the firm grapples with an exploding air bag crisis linked to at least five deaths that also led to the recall of millions of vehicles.

The firm said the move was squarely aimed at strengthening its global expansion strategy with a younger leader.

But the departure of company veteran Takanobu Ito, 61, comes at a difficult time for Japan’s number-three automaker and for parts maker Takata, whose air bags are at the centre of the scandal. The maker of the Civic sedan said Ito, who joined Honda in 1978, would remain on its board, while managing director Takahiro Hachigo, 55, would step into the top job after a shareholders’ meeting in June.

At a press conference in Tokyo, Ito painted the switch as crucial to Honda’s “next big leap forward”.

“I decided to hand the post over to Hachigo as I thought it would be a good time for the company to be united and take on new challenges under new and younger leadership,” he told reporters.

Last month Honda cut its full-year profit forecast as it grapples with soaring recall costs, and said it was probing another fatal crash in the United States that may have been caused by a defect in airbags made by Tokyo-based Takata.

The crisis has sparked the recall of more than 20 million vehicles worldwide by 10 major automakers.

Honda — which is Takata’s biggest air bag customer and accounts for more than half of the air bag recalls — warned at the time that it was cutting its full-year outlook by 3.5 per cent to 545 billion yen ($4.6bn), citing “quality-related expenses” as well as falling demand in Japan and the world’s biggest vehicle market, China.

Honda has said its recalls, also including those involving its Fit compact car and Vezel SUV, diluted the positive impact of the yen’s sharp decline, which inflated profits among major Japanese exporters.

Takata has been plunged into a public relations crisis as it faces lawsuits, calls for a criminal probe and accusations of “deception and obfuscation” over the deadly defect that has seen air bags deploy with excessive explosive power, spraying potentially fatal shrapnel into the vehicle.

Published in Dawn February 24th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play