Takata plunges as automakers desert crisis-hit airbag maker

GMT 12:21 2015 Saturday ,07 November

Arab Today, arab today Takata plunges as automakers desert crisis-hit airbag maker

Japanese airbag supplier Takata Corp Chief Financial Officer Yoichiro Nomura
Tokyo - AFP

Takata plunged again Friday in a three-day rout that saw its shares lose nearly 40 percent of their value as automaker clients move away from crisis-hit Japanese airbag supplier.

The Tokyo-listed stock went into a freefall this week as US safety regulators slapped Takata with a record $200 million fine over exploding airbags linked to eight deaths and scores of injuries.

The losses mounted as top client Honda -- which accounts for about 10 percent of Takata's $5.3 billion in global sales -- dumped it as an airbag parts supplier.

Then, on Thursday, Mazda, Subaru-maker Fuji Heavy Industries and Mitsubishi Motors said they were considering dumping Takata's airbag inflators in their new models.

By the break Friday, the battered shares had lost half their value in just a few days.

But Takata stock pared a 15 percent morning plunge, closing down 6.2 percent Friday at 834 yen (6.90). The shares are still down nearly 40 percent in three days of trading.

The airbag defect -- thought to be associated with a chemical propellant that helps inflate the devices -- can cause them to deploy with explosive force and send metal shrapnel hurtling toward drivers and passengers, killing some and leaving others with grisly injuries.

"We need to identify the true cause of the problem," Toyota president Akio Toyoda said Friday, adding that his firm would not use airbags with the propellant suspected in the accidents.

"As for other types of Takata airbags, if we can make sure they are safe we will examine it case by case."

Nissan has declined to comment on its future relationship with the airbag maker, but said it was "disappointed with Takata concerning the findings about its conduct".

Accusing the company of a years-long deception over the safety of its airbags, US safety authorities on Tuesday announced up to $200 million in penalties.

Some 50 million vehicles worldwide have been recalled over the problem.

After markets closed Friday, Takata reported a six-month net loss of 5.6 billion yen ($46 million) as costs stemming from the crisis pile up.

Yoichiro Nomura, Takata's chief financial officer, declined to discuss the stock's plunge, saying his firm was focused on making alternate airbag inflators.

"I don't think the impact on our earnings will be big this fiscal year. For next year, we haven't closely examined it yet," he told reporters Friday.

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