airbag

Takata is estimating that at its worst, a cost of USD$24 billion (RM93 billion) would be required to rectify all known faulty airbags across the globe. According to Bloomberg, an unnamed sourced disclosed the information, adding that the airbag supplier has identified a total of 287.5 million faulty inflator units thus far.

This surpasses a previous estimate made in February by an analyst who suggested that the figure would be around the USD$17 billion (RM66 billion) mark instead. Worryingly for Takata, the new estimation is said to be four times higher than the airbag supplier’s forecasted revenue for its financial year ending this month.

Splitting the costs is another issue. Takata, along with the involved automakers, have yet to reach a decision on this. “The question is how much the car makers want to split costs. But even if Takata only bears half of this cost, this would still be beyond their scope,” said Ken Miyao, an analyst from Tokyo-based market research outfit, Carnorama.

In February, Takaki Nakanishi, an analyst with the Jefferies Group LLC, estimated that the cost to replace just one airbag inflator unit was on average USD$80 (RM311). At the time, it was also believed that the rectification costs had risen to around the USD$5.5 billion (RM21 billion) mark. Note that these figure do not include fines and lawsuits faced by the company.

With more and more manufacturers dropping the Japanese airbag supplier in the wake of its troubles, Takata is in for the fight of its life. Read our detailed report here about how and why Takata airbags rupture, often times with devastating results.