Nippon Kayaku employs almost 5,200 staff on a consolidated basis.
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Takata uses inflators made by Daicel as well as its own – and this has increased since the recall began.
In the strongest proactive response to the recall crisis by a major vehicle manufacturer, Toyota Corp is inking a deal with Nippon Kayuku to supply airbag inflators.
Takata airbags were the cause of a number of deaths and more than 100 injuries after exploding with disproportionate force, due to which shrapnel was sprayed into the vehicles.
Automakers are taking the burden of most recalls on themselves while the roost cause is determined.
Lawmakers in the United States have urged Takata to recall immediately all cars equipped with the company’s airbags, a demand that could affect more than 50 million cars on US roads.
An analyst however disclosed that Takata may not be too affected if Toyota turns to Nippon Kayaku for inflators; this “will replace the high-risk ones, in other words the older ones, first and then proceed sequentially” to newer inflators.
Takata said that exposure of a long period to high humidity and heat could make the air bags open with great force.
The cars that were recalled so far is at least five years old.
The source, who asked not to be named because discussions are confidential, told Reuters that Toyota has asked Nippon to increase its production facilities. Estimates upwards of $150 million have been suggested as the price tag for replacing the airbag inflators in Toyota alone’s aging cars.
The inflators become more risky as the vehicle ages.
Toyota, which vies with Volkswagen as the world’s biggest carmaker, is a pioneer of lean manufacturing and keeps minimal inventory to reduce costs and improve efficiency.
The decision will not prevent Toyota from buying Takata inflators. But the shares for Takata and Toyota remain at their equilibrium.
Nakanishi adds that even if Takata’s inflator business were to end, the company still has other options, according to Reuters. This move will reduce its risk from potentially flawed airbag inflators supplied by Takata.
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Sources reveal Toyota requested Nippon Kayaku to raise production of inflators to 13 million as from next year, and Toyota will be buying the parts as from July 2016 to late 2020.
