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Honda charged another $363 million over Takata airbags

The Takata airbag recall is growing increasingly expensive for Honda. In the latest hit to the automaker's bottom line, the company is revising the expected costs of its global safety campaigns by an additional 44.8 billion yen ($363 million) after the massive expansion in May. Months ago, Honda announced that it had set aside 50 billion yen ($425 million at the time) to meet the predicted expenses. According to Automotive News, due to the rather arcane laws of accounting, these new costs will actually be applied to the fiscal year that ended on March 31, rather than the current one. Honda's revised earnings will be announced in late June. The company previously reported an operating profit of 651.7 billion yen ($5.3 billion), which was down 13 percent from the previous year. There has been no change to planned dividends for investors. In the US, Honda and Acura have a total of about 6.28 million vehicles in need of a replacement airbag inflator, and the automaker says about two million of those are already repaired. In addition to the Takata campaign, the company has faced other financial setbacks during this calendar year. For example, in early January, it received a $70 million fine from the National Highway Traffic Safety Administration for failing to report 1,729 cases of injuries or deaths over 11 years. As part of a strategy to improve quality globally, Honda cut back its global sales forecasts for the coming year, and it also decided not to make any volume predictions through 2017. To: Shareholders of Honda Motor Co., Ltd. From: Honda Motor Co., Ltd. 1-1, Minami-Aoyama 2-chome, Minato-ku, 107-8556 Tokyo Takanobu Ito President and Representative Director Notice of Events after the Reporting Period Regarding Product Warranty Expenses Honda Motor Co., Ltd. (the "Company") and its consolidated subsidiaries have been conducting market-based measures in relation to airbag inflators, such as product recalls and a Safety Improvement Campaign. Due to factors arising since May 2015 such as an expansion of the scope of these market-based measures based on an agreement between our supplier and the U.S. National Highway Traffic Safety Administration, a change has arisen in the estimate relating to product warranty expenses. The amount of product warranty expenses now expected to be incurred is 44,800 million yen.

Editors' Choice: Top Five 2015 Frankfurt Motor Show Debuts

Consider the 2015-16 auto show season officially kicked off. The Frankfurt Motor Show offered a great look at the newest crop of production cars and conceptual machines, and brought some old favorites back into the spotlight for a closer look. (The Alfa Romeo Giulia, for example, debuted in June, but this was the first time most of us saw it.) Now that the dust has settled and we're all on flights back to the US, our editors cast their votes for their personal favorites from the Frankfurt show. These are the cars we truly loved seeing the most. But unlike other shows, there was no one runaway winner – all of the Top Five received positive praise from our team. We won't spoil the results, though. Scroll down to see what we liked most from this year's Frankfurt expo. 5th Place – MERCEDES-BENZ IAA CONCEPT View 12 Photos MIKE AUSTIN: The clean lines on this concept have me excited for a more elegant beauty to future Mercedes-Benz vehicles. Next to the Concept IAA, the lovely S-Class Coupe looks like an overstyled barge. DAVID GLUCKMAN: Yeah, the extendable rear is neat and all, but I'm more interested in the front-end styling of this one. It looks like the Tron version of a 300SL, in a good way. I'm hopeful it portends the future of Mercedes design. STEVEN EWING: I was super impressed when Mercedes said that, with the rear end extended, this concept has a drag coefficient of just 0.19. That's crazy aerodynamic. I'm not head-over-heels about the styling, but I think the lessons learned from this concept are really important, and will play a huge role in the future of Mercedes' products. 4th Place – ALFA ROMEO GIULIA View 15 Photos SEYTH MIERSMA: I can hardly express how in love with this car I am. The styling feels creative, modern, and evocative, without going over the top. The proposed performance is spectacular. And the Alfa badge speaks to a legacy of romantic motoring. DAVID GLUCKMAN: Pretty Italian car makes big promises and will probably deliver on about three quarters of them. I think that will still be enough for me. JEREMY KORZENIEWSKI: I'm really intrigued by the Giulia. It looks great, sounds awesome, and I'm expecting it to have a load more character than its German rivals. I hope I'm not disappointed. 3rd Place – JAGUAR F-PACE View 15 Photos GREG MIGLIORE: It's the first SUV for Jaguar, and I think they nailed the design, capability, and electronics. It's the right car at the right time.

Honda finance to pay $24M for discriminatory lending practices

Honda has found itself in hot water in the United States over allegations of discriminatory lending practices. However the Japanese automaker's American subsidiaries are taking actions to not only alter its practices, but compensate the victims of such past discrimination. According to the Consumer Financial Protection Bureau, some Honda dealers were found to have offered less preferential loans to customers of African-American, Hispanic, Asian, and Pacific Islander ethnicities than they have offered to white customers, irrespective of their individual financial situations. The American Honda Finance Corporation has allowed dealers to mark up individual loans by two percent or more, depending on the length of the loan's contract, thereby opening the door for dealers to set interest rates at their discretion. And that discretion, according to the CFPB and the Department of Justice, has been applied in a discriminatory fashion, in violation of the Equal Credit Opportunity Act. Honda, for its part, refutes the allegations and maintains that its practices have not been racially or ethnically discriminatory. The company is nevertheless taking measures to address the charges. For one thing, Honda's US financial arm is reducing the amount of wiggle-room it gives its dealers to only 1.25 percent above the buy rate for short-term loans (5 years or less), and one percent for longer-term loans. It has also set up a $24-million fund to compensate victims of the alleged discrimination, coordinating with the CFPB on the dispersal of said funds. The CFPB reports that "because of Honda's responsible conduct," it is not seeking penalties to be levied against the company for the alleged discrimination. STATEMENT BY AMERICAN HONDA FINANCE CORPORATION RE: Settlement with the Department of Justice and Consumer Financial Protection Bureau Jul 14, 2015 -- American Honda Finance Corporation (AHFC) has reached an agreement with the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) that shows our commitment to work together to be part of the solution and to establish the path forward that best supports our Honda and Acura customers and dealers with clear and convenient financing options. AHFC strongly opposes any form of discrimination, and we expect our dealers to uphold this principle as well. We firmly believe that our lending practices have been fair and transparent.