Takata customers to remain with supplier for now despite company’s troubles

Article by Christian A., on October 29, 2014

While the current scandal concerning Takata Corp. and its potentially faulty car air bags tied to four deaths in the United States are hurting its business, its customers are unlikely to drop the Japanese supplier for now. At least, carmakers cannot just entirely shift to another supplier, since it would be very costly and could cause a disruption in production, a person privy with the matter told Reuters.

While rival suppliers are getting some business away from Takata’s customers, the industry doesn't have enough idle capacity to grab them all from the Japanese company. That is for now. In the next few years, carmakers would be launching new models, which may not be fitted with Takata’s airbags, given the magnanimity of the recall in the US – a true test of customers’ loyalty to the company.

"Takata's not going away," remarked Scott Upham, president of Valient Market Research and a former executive at the Japanese supplier and at TRW Automotive Holdings Corp. He added that as per Japanese tradition, Takata will “take their lumps” and quiet about it and then make it up to its customers over time.

Industry officials have noted that Takata has a cash position strong enough to survive the crisis, adding there are yet indications that its customer would ditch it. Since airbags are built into a car's design, they can be replaced by another make.

Likewise, vetting the safety of a new design takes both time and money. So far, the recall has involved 7.8 million cars sold in US locations with high humidity. Three US senators, however, are calling for the shift from regional callbacks to a nation-wide recall, which would mean another 5.3 million units, according to Reuters calculations based on data from the carmakers and the National Highway Transportation Safety Administration.

Topics: takata, airbag, recall

If you liked the article, share on:

Comments

Recommended

Another day, another record. Is the new Dodge Challenger SRT Demon the fastest car to date? According to some sources, the Dodge Challenger SRT Demon had just beaten the Tesla...
by - April 24, 2017
Following in the footsteps of the McLaren 570S, 540C and 570GT is the newest addition to the McLaren Sports Series -- the roofless 570S Spider. McLaren 570S was rolled out...
by - April 24, 2017
The British automaker Lotus is noted for releasing low production, limited editions of its sports car lineage. Now the Hethel-based automobile manufacturer is back at it again with its latest...
by - April 24, 2017
Earlier this week, the revamped 2018 Mercedes-Benz S-Class was revealed ahead of the 2017 Shanghai Auto Show. As expected, Mercedes Benz’s flagship model is now offered in several variants including...
by - April 24, 2017
Well, this is clearly not good news for everyone. Ever since the new BMW M4 CS rolled out in Shanghai last week, several reports about its limited production have quickly...
by - April 24, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries