Core Viewpoint - Hyundai is recalling hundreds of thousands of Palisade SUVs due to potential airbag deployment issues, which do not meet federal safety standards [1][5] Group 1: Recall Details - The recall affects Palisade vehicles from model years 2020 to 2025, specifically concerning the side curtain airbags for third-row occupants that may deploy improperly in a crash [1] - The National Highway Traffic Safety Administration (NHTSA) is overseeing the recall and has indicated that a remedy is under development, with owner notification letters expected to be mailed in mid-March [2] Group 2: Additional Recalls - Hyundai has also issued a separate recall affecting over 41,000 vehicles due to a software error in the instrument panel display, which impacts the visibility of critical safety information [3] - This additional recall includes certain 2025 to 2026 model-year vehicles such as the Tucson Hybrid, Ioniq 5, and others, which also do not meet federal safety rules [4]

Summary of Key Points from the Conference Call Industry Overview - **Tire Industry**: Positive sentiment due to steady replacement demand and growth in large-diameter tire sales. [2] - **Auto Parts Industry**: Cautious outlook due to declining new car production and completion of price pass-throughs to OEMs. [3] Company-Specific Insights Tire Industry - **TOYO**: High expectations for the expansion of high-performance tire sales and aggressive share buybacks. The stock outperformed in 2025, with potential for P/B re-rating based on ROE improvement. [2] - **Bridgestone**: Focus on cost improvements from restructuring and demand for mining tires. Comparisons with Michelin were discussed, indicating a competitive landscape. [2][9] Auto Parts Industry - **Nifco**: Plans for further share buybacks under a mid-term plan starting in F3/27 and sales expansion to Chinese OEMs. [3] - **Koito**: Expected earnings improvement through streamlining operations and enhancing lamp added value. [3] - **Toyoda Gosei**: Rated Overweight (OW) with investor interest in airbag growth and market share gains. Target P/E is set at 11.0x, slightly above the industry benchmark of 10.0x. [9][10] Investor Sentiment - Investors showed less interest in Tires compared to Japanese and Asian investors, but remained positive about stable earnings driven by solid replacement demand and a shift to larger tires. [9] - Interest in business restructuring within the Toyota group was noted, particularly regarding Nifco and Koito Mfg. [9] Risks and Opportunities - **Upside Risks for Toyoda Gosei**: Recovery in Toyota sales and production, expansion of airbag sales beyond Toyota, and growth in the eRubber business. [12] - **Downside Risks**: Competition for orders with overseas competitors and declining sales of sedan models. [12] Valuation Methodology - Toyoda Gosei's target P/E is based on expected competitive standing in the passive safety space and market share growth in the medium term. [10] Conclusion - The overall sentiment in the Tire industry is attractive, while the Auto Parts industry is viewed as in-line. There are specific growth opportunities and risks associated with key players in both sectors. [6][9]