Research and Markets - Takata Estimate USD 24 Billion Recall Cost for Defective Airbags

Mar 30, 2016, 08:24 ET from Research and Markets

DUBLIN, March 30, 2016 /PRNewswire/ --

Takata Corp. has predicted a potential USD 24 billion cost for a complete callback of the defective airbag inflators responsible for nine fatalities in the United States. The Japanese automotive parts company has revealed a worst-case scenario recall of 287.5 million airbag inflators, the biggest of its kind in the history of the auto industry. Takata shares plummeted by around 20% to an all time low of 414 yen as a result of the cost estimation. The global automotive safety systems market is expected to grow at a CAGR of 9.43% by 2019, according to a report available from Research and Markets, but Takata's recall could have an unprecedented effect on this market. Consumer concerns regarding automotive safety could lead to heavy investment in this market from automotive makers, spurring on further growth.

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Takata's USD 24 billion estimation is almost four times the revenue the company has forecast for its fiscal year ending this month, and almost six times the total assets of Takata's balance sheet for the end of 2015. The National Highway Traffic Safety Administration has determined faulty Takata airbag inflators to be the cause of nine fatalities in the U.S., which occurred when ruptured airbags sprayed metal and plastic shards at drivers. The NHTSA has given Takata until the end of 2019 to identify the origin of the defect or prove that their airbag inflators are safe for consumers.

The recall is expected to influence the size of a number of markets. The global automotive sensors market is forecast to grow at a CAGR of 7.72% by 2020, as noted in a recent report, but this growth could far larger if automakers are required to advance the sensor technology of their vehicles to reassure worried customers.

The global automotive passive safety systems market will grow at a CAGR of 6.90% by 2019, as forecast by an industry report, but again it's likely that this growth will be greater than expected due to Takata's vast airbag inflator recall influence on future automotive safety standards.

For further information on this topic, and a full list of all related documentation, please visit the Automotive Safety section at


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