Airbag recalls lead to record Takata loss image

The Japanese auto safety parts producer, one of the largest in the world, has forecasted it would lose a record amount in 2014 as the callbacks mount. Automakers have already recalled millions of vehicles this year to replace a defective inflator produced by the Japanese maker.

According to the Tokyo-based company, the maker of the faulty airbags – an inflator tends to malfunction, sending shrapnel and debris into the cabin – its full-year net loss would amount to 24 billion yen ($235 million).

“They are going to survive,” said Scott Upham, president of Valient Automotive Market Research. “They will have to go through a period where they are contrite and showing they’re doing everything to make things right.”

“A recall that has ballooned to this big will definitely leave a bad impression for carmakers,” said Masahiro Akita, an analyst with Credit Suisse Group AG. “It may not be easy for them to cut all the ties with a company that holds 20 percent of global share, but it’s also hard to imagine there’s going to be no impact on future business.”

Defective Takata products have so far this year prompted automakers to call back into service 6.47 million units globally, according to a report issued by Shintaro Niimura, an analyst at Nomura Holdings Inc.

Via Bloomberg