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.

If you liked the article, share on:

Topics: takata, airbag, recall

Comments

Recommended

Many automakers seem to always have the Nurburgring in the back of their heads when they build new cars. And a lot of them seem to be obsessed about making...
by - December 12, 2017
Niels van Roij Design has revealed a number of new renderings of the company’s upcoming shooting brake. Inspired by the Tesla Model S, this one-off model is scheduled to be...
by - December 12, 2017
Mercedes-Benz has officially released the pricing details of the new 2019 CLS. The base variant is the CLS 350d 4Matic that’s equipped with the inline-six rated engine and comes with...
by - December 12, 2017
In addition to revealing the first images, ARES Design also released new information on its upcoming supercar dubbed as “Project Panther.” The company is aiming for this new model to...
by - December 12, 2017
Mercedes-AMG revealed that it will be unveiling the CLS 53 during the North American International Auto Show in January 2018. This was confirmed by none other than that brand’s very...
by - December 12, 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