 "Nissan Patrol")
Nissan Motor joined Toyota Motor and Honda Motor in saying they won't use key components made by Takata Corp, as more automakers come out to distance themselves from the air-bag supplier whose defective devices are behind the biggest ever automotive safety recall.
"In line with the recent announcement from the United States' National Highway Traffic Safety Administration, we have decided to no longer use inflators containing ammonium nitrate in airbags for future models," Dion Corbett, a Nissan spokesman, said in an e-mail on Saturday. "We will continue to put our customers' safety first and work to replace the inflators in vehicles under recall as quickly as possible."
Honda, Toyota and Nissan are the three companies with the most number of vehicles recalled because of Takata's air bags, which have been found to rupture with excessive force and are linked to more than a hundred injuries and eight deaths. Tokyo- based Takata posted a 8.66 billion yen ($70 million) loss in the second quarter, and slashed its full-year net income forecast to 5 billion yen from 20 billion yen after incurring losses related to recalls.
"The inflator using ammonium nitrate produced by Takata will not be adopted by Toyota," Akio Toyoda, Toyota president, said at a briefing in Tokyo. "What's most important above anything else is the safety and peace of mind of customers."
Mazda Motor said on Thursday its new cars will no longer use Takata air-bag inflators, while Subaru-maker Fuji Heavy Industries and Mitsubishi Motors are considering the same. The comments follow Honda's decision to stop using Takata inflators in new models and its accusation that the company manipulated test data.
The emerging rifts mark an unusual repudiation in Japan, where corporate relationships are measured in decades and Takata had counted on automakers' support despite more than a year of criticism from US lawmakers and its auto-safety regulator. Even investors appeared to think the worst was over, with the stock up 14 per cent this year at one point through May. The tide turned this week when Honda surprised the market and set the stage for a potential exodus of more customers.
"Although recall costs were piling up, Takata's operational profits weren't bad, which is why the market was optimistic," said Chihiro Ota, general manager at SMBC Nikko Securities Inc. in Tokyo. "But with customers now distancing themselves from Takata, investors started worrying about how the company can pay all those costs. What can ease this drop? Until we know how it happened and where the responsibility lies, the trend is down."
Takata fell 6.2 per cent in Tokyo trading on Friday, resulting in a 39 per cent three-day decline, the most on record.
Honda's desertion was significant as it led analysts to openly question Takata's ability to survive and even President Shigehisa Takada acknowledged a risk to the company's existence. Asked whether the company will survive, 49-year-old Takada told reporters Wednesday, "there's risk."
Any blows to Takata's air bag business are devastating because it's the company's largest product segment, at 38 per cent of its 642.8 billion yen in sales for the fiscal year through March. Inflators are only a portion of its air bag products, and other components the company has to fall back on include seat belts, steering wheels, electronics and child seats.
Takata has hired SMBC Nikko Securities to draw up a fundraising plan for the air-bag supplier, with the financial adviser proposing an additional share sale as one of the potential options, according to people familiar with the matter.
"I really don't see how they're going to be able to survive as an inflator manufacturer," Scott Upham, founder of Valient Market Research, who has followed the air bag industry for more than two decades. "When your major clients publicly come out and say that they're not going to use your products anymore, it makes this very difficult to sustain your business."
Takata's share of the global market for air bag inflators may fall to 5 per cent by the end of the decade, from 22 per cent last year, Valient estimates.
