As the firm grapples with a massive global recall of its faulty products, embattled air bag maker Takata Corp. is asking major Japanese automakers such as Toyota Motor Corp. to refrain from demanding a parts price cut in annual negotiations, sources familiar with the matter said Tuesday.
If an agreement is reached, it will be the first major step taken by automakers to support Takata in relation to the latest air bag problem amid fears of further rises in recall costs. The automakers have yet to decide whether to agree to Takata’s request, the sources added.
With roughly 50 million cars equipped with Takata air bags being recalled globally, the major supplier is apparently seeking to soften the impact of potential recall cost increases on its earnings.
Forgoing a 1 percent cut in parts prices is likely to improve Takata’s earnings by around ¥6 billion a year, one of the sources said.
The supplier has already booked recall costs for replacing its air bags on some 9.5 million vehicles and is expected to negotiate how to share costs of recalling air bags on other vehicles with automakers.
In accidents involving faulty Takata air bags, inflators ruptured and hurled metal fragments, killing at least 8 people and injuring about 130.
Takata Chairman and Chief Executive Officer Shigehisa Takada said last week the company is still looking into the cause of the problem that prompted millions of cars to be recalled.