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

The Bentley Bentayga is set to participate in the famous Pikes Peak International Hill Climb that is slated to take place on June 24th in Colorado. The automaker’s motorsport department...
by - January 19, 2018
Infiniti will commence sales of the new 2019 Infiniti QX50 in the spring, with a starting price of $36,550. But before the big launch, Infiniti has introduced a new reservation...
by - January 18, 2018
BMW fans may be surprised with what the car manufacturer’s boss Robert Irlinger said in a recent interview with Autocar during a recent media meeting. And this is the fact...
by - January 18, 2018
Currently, there aren’t any Lexus convertibles out in the market, but it seems like it won’t be too long until we see one again. This is because Toyota’s premium brand...
by - January 18, 2018
Hyundai revealed to the press that it doesn’t plan on breaking any kind of top speed records with its newest N performance line. That is because the brand mainly focuses...
by - January 18, 2018
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