US: automakers would have trouble severing Takata ties image

Since 2008 – with 11 million since 2013 in the US alone – millions of autos from ten brands have been recalled because of a potential defect in the airbags produced by Japanese automotive supplier Takata Corp.

And while the airbag scandal gains proportions – with the company under scrutiny from federal regulators, including a criminal probe – and facing the prospective of a nationwide expansion of the recalls, Takata should worry little about its automotive partners turning to the competition. The NHTSA has ordered Takata and five automakers to consider expanding regional recalls to a US wide level – as the faulty part makes the airbag’s inflator explode with too much force and send metal debris flying inside the cabin at high velocity.

But while Takata makes a big portion of its business from selling airbags, automakers such as Honda, Ford or General Motors have deeper ties with the Japanese supplier – jointly working on new features for years. Dave Sullivan, an analyst at AutoPacific Inc. says these links would make difficult, if not impossible, a swift dismissal of Takata in favor of its rivals. For example, Ford’s new Edge crossover uses a steering system co-developed with Takata. The Japanese supplier has 39% of its earnings coming from the airbags business (according to figures from the latest fiscal year report), seat belts make up another third of its sales at 178 billion yen and other products, such as steering wheels, make up the rest.

Via Bloomberg