Toyota, 3 other automakers settle suit over Takata air bags

Four carmakers will pay $553m to settle claims over Takata airbags

There are four sections of the proposal, which must be approved by the U.S. District Court for the Southern District of Florida.

A recall of vehicles fitted with the Takata airbags began in 2013, due to a safety defect which meant inflators could explode with excessive force and potentially launch shrapnel into cars. The problem touched off the largest automotive recall in US history involving 42 million vehicles and 69 million air bag inflators.

The settlement calls for reimbursing current and former auto owners and lessees for costs they incurred for renting or buying replacement vehicles while waiting for those with defective air bags to be fixed.

Part of the settlement money will be used to encourage consumers whose cars are under recall to bring them to dealers for fix. The rental car/loaner program will provide rental or loaner vehicles upon request to eligible customers for whom recall fix parts are not available within 30 days.

The settlement would also require the automakers to step up their efforts to locate owners and educate them about the need to complete the recall repairs.

Just over 30 percent of Toyota and Subaru vehicles have been fixed, and that number is under 20 percent for Mazda and BMW, according to the National Highway Traffic Safety Administration. US safety regulators have determined that older cars are at the highest risk, since a chemical Takata used in its air bags can break down over time when it's exposed to humidity.

TM's share of the settlement costs is $278.5M, followed by BMW (OTCPK:BMWYY) at $131M, Mazda (OTCPK:MZDAY) at $76M and Subaru (OTCPK:FUJHY) at $68M; lawsuits against Honda, Ford and Nissan have not been settled. The 2002-2006 BMW 3 Series, 2003-2006 Mazda6, 2005-2008 Subaru Legacy and 2003-2007 Toyota Corolla are among the vehicles covered by this settlement that are considered the highest risk.

The deal - which comes more than eight years after initial reports of the recall first emerged - stipulates that the carmakers will pay $553 million.

In January, the company pleaded guilty to corporate criminal charges and agreed to pay a $1 billion fine.

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