Takata Reports Higher Profits Despite Expanding Airbag Crisis
Takata posted a sharp rise in quarterly profits and revenue, even as global recalls over its defective airbag inflators continued to widen and pressure the supplier.
Takata increased its net income to 8.1 billion yen for the quarter ending December, up from 2.8 billion yen a year earlier, despite the ongoing global safety crisis over its airbag inflators. The Japanese supplier also reported revenue of 184.1 billion yen for the quarter, compared to 167.9 billion yen in the same period last year.
Growth in sales across the US and Asia helped Takata offset the financial impact of the airbag recalls, which have affected millions of vehicles worldwide. The supplier’s report showed operating income for the first three quarters rose 37.7 percent to 32.2 billion yen, while revenue for the same period climbed 15.7 percent to 543.4 billion yen. Net profit for the first three quarters stood at 2.52 billion yen.
Takata did not revise its full-year net profit forecast for the financial year ending 31 March, holding it at 5 billion yen. However, the company acknowledged that its projections did not account for the most recent wave of massive recalls, which could drive costs higher in the coming months. The ongoing crisis has seen automakers repeatedly expand their safety campaigns as new information about the defective inflators emerges.
Automakers Expand Recalls Over Defective Airbags
Honda, Takata’s largest customer, recently announced an additional recall of 2.23 million vehicles in North America due to the airbag inflator defect. The company followed this with another recall of 443,000 vehicles in Japan, including Fit compact cars. Other manufacturers have also widened their recall campaigns as testing reveals further risks. For more on the technical findings behind these recalls, see Takata Airbag Recall Testing Reveals Hundreds of Ruptures.
The scale and frequency of the recalls have put Takata under intense pressure from automakers and regulators. The supplier is reportedly preparing a restructuring plan to present to its customers, which could include proposals for sharing the spiralling recall costs. Discussions with carmakers are ongoing, but no agreement has been confirmed.
