Continental is the supplier of faulty airbags in Audi recall image

The German auto parts supplier acknowledged that Audi’s 850,000 units global recall was tied to airbags and their software produced by Continental, and fixing the defect could lead to a double-digit million-euro amount.

The automotive supplier said the issue that hit the A4 model of the premium sportscar maker Audi is not related to the ongoing Takata debacle and that it would absorb the repair costs without changing its forecast for profit. Last month the German carmaker, a subsidiary of the Volkswagen Group, announced it decided to issue a recall campaign to fix potentially defective software that could lead to airbags failing to deploy in 850,000 cars worldwide.

“We are the supplier of the system”, said Continental’s Chief Executive Elmar Degenhart, adding that the root cause of the problem has not been identified yet, and so far the companies don’t know if the fault lies with the automaker or Continental – their engineers are still looking for the trigger in the faulty software. “It can be between zero and a double-digit million amount,” Degenhart added when asked how much it would cost the supplier to fix the defect if it was found liable but if it had to pay the costs would most likely have no effect on the earnings guidance because both parts makers and auto producers usually have provisions that could be used to pay recalls.

Via Reuters