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Takata Airbags – The Mother of all Product Recalls

Takata’s latest estimate that the airbags fitted in 34 million cars are defective will lead to the largest ever recall of cars in the US.  The recall affects 11 car makers including Honda, Toyota, Daihatsu and Nissan.  This is the latest twist in a saga that has been going on since at least 2008; indeed the New York Times has alleged that Takata knew about the problem in 2004. Despite this, there is still no definitive explanation of the cause of the problems, which are linked to 6 deaths and over 100 injuries.

It is unclear how such a massive and long-running recall will affect the long-term viability of a firm with annual revenues of only about $6b, particularly as the company is primarily associated with safety equipment: 38% of revenue comes from sales of airbags and a further 32% from seat belts.  Nevertheless, according to a presentation of the company’s 2015 financial results (available on their website), the outlook is good with a predicted 9% rise in sales next year!