TOKYO/DETROIT - Honda Motor Co said it would recall another 440,000 cars around the world for faulty airbags, as rival Toyota Motor Corp faced further probes over its largest-ever safety crisis.

Honda, Japan's No. 2 automaker, has now recalled close to 950,000 vehicles for airbag problems linked to one fatality and a total of 11 injuries in the United States.

While auto recalls are not uncommon and Honda's is not huge, it comes at a sensitive time for an industry struggling to draw customers back to showrooms after a brutal downturn.

Toyota, the world's largest carmaker, is facing a storm of criticism over safety issues and its response to them.

In the latest of a string of product problems for Toyota, U.S. regulators said they were reviewing dozens of complaints about potential steering problems in newer Toyota Corollas.

The National Highway Traffic Safety Administration (NHTSA) said it was discussing the matter with Toyota to see if a formal investigation was warranted, a standard procedure when reviewing complaints.

Toyota will stop production of its Lexus HS250h and Sai hybrids in Japan from Saturday through February 20 as it modifies the production process to fix braking problems in the vehicles, a company spokeswoman said.

The move comes a day after Toyota expanded its recall to include more than 400,000 of its latest version Prius and other new hybrid models due to insufficient braking. It also recalled more than 7,300 late-model Camrys in the United States for a separate braking problem.

That comes on top of 8.1 million vehicles recalled since September for problems with slipping floormats and sticking accelerator pedals that have been linked to crashes that killed at least 19 people.

In a bid to prevent the crisis from hurting U.S.-Japanese relations, Japanese Transport Minister Seiji Maehara met U.S. Ambassador John Roos on Wednesday.

I believe we should not let this problem hurt the bilateral relationship and free and fair market activities, Maehara told reporters after the meeting.

Roos said, I emphasized to him that this is a safety issue and I very much appreciate how the minister, the ministry as well as Toyota are on top of this issue.

He added, I just want to emphasize it in no way has direct or indirect impact on the strength of the bilateral relationship between the United States and Japan.


A U.S. congressional committee postponed a hearing scheduled for Wednesday to examine the recalls and Toyota's response, as a snowstorm hit Washington.

Toyota President Akio Toyoda said on Tuesday he might travel to the United States next week to tackle criticism that his company moved too slowly on earlier recalls.

Toyota faces potential litigation over the crashes linked to the problem of unintended acceleration, as well as class-action lawsuits over the brake problems with the Prius.

The cost of buying protection on Toyota's debt hit a seven-month high this week as its recall woes widened, but its borrowing costs are not expected to jump.

Toyota is cash rich, said Mana Nakazora, head of credit research at BNP Paribas. The firm can afford to wait for a better time to raise funds than now.

Toyota, which had cash and cash equivalents of 2.13 trillion yen ($24 billion) at the end of December, has nearly $72 billion in bonds outstanding, according to Reuters data.


Honda Chief Financial Officer Yoichi Hojo told Reuters the recall of 437,763 vehicles would cost 2-3 billion yen.

That comes on top of a recall of Accord and Civic sedans, first announced in November 2008, due to faulty airbag inflators. Initially, that recall involved 4,200 vehicles, but it was expanded last June to cover an additional 510,000 globally.

The faulty inflators could produce too much pressure and risk rupturing their casings, sending shards toward the driver in an accident.

The airbags are made by the U.S. unit of Japan's Takata Corp, a Honda spokesman said. A spokesman at the supplier said the company was not aware of any defect in airbags it supplies to other automakers.

Hojo said Honda would ask Takata for compensation of some sort and to improve its production line, as the fault originated in the manufacturing process, not the design approved by Honda.

The latest recall applies to 2001 and 2002 models of the Accord, Civic, Odyssey, CR-V, Pilot and 2002 Acura TL and CL vehicles in the United States, as well as the Inspire, Saber and Lagreat in Japan. All vehicles are made at Honda's U.S. and Canadian plants.

Last month, Honda announced a global recall of about 646,000 cars for a fault with a window switch.

Some analysts said automakers regularly make recalls, and media reactions to recent cases had been overblown.

While the way automakers handle recalls is important, I think people should be careful not to overreact to every single recall, said Yoshihiko Tabei, chief analyst at Kazaka Securities.

Rather, my concern for the auto industry is their earnings for the next financial year, given the absence of the boost they enjoyed from government incentives this year.

Honda shares closed down 1.6 percent in a Tokyo market up 0.3 percent, while Toyota shares, which have lost about a fifth of their value since late January, rose 0.4 percent.

Europe's second-largest carmaker, PSA Peugeot Citroen, said on Wednesday that its own recall of 97,000 vehicles made on the same assembly lines as Toyota's Aygo at a Czech plant would not have a material impact.

Unlike peers Ford, Hyundai Motor and General Motors, PSA has no particular plans for special offers to lure disgruntled Toyota customers toward their cars, Chief Executive Philippe Varin told a news conference.

($1=89.75 Yen)

(Reporting by Chang-Ran Kim in Tokyo and Soyoung Kim in Detroit; additional reporting by Yumiko Nishitani and Taiga Uranaka in Tokyo, David Bailey and Bernie Woodall in Detroit, John Crawley in Washington and Helen Massy-Beresford in Paris; Writing by Lincoln Feast; Editing by Jean Yoon and Will Waterman)