Takata Asks Customers for Price Relief

Takata Corp. is asking its customers to temporarily suspend their demands for price cuts while the company copes with the cost of recalling tens of millions of flawed airbag inflators that could explode when activated in a crash, The Nikkei reports.

Postponing the reductions would increase Takata's earnings by about 10 billion yen ($82 million) per year, according to the newspaper. It says Japanese auto parts suppliers routinely cut prices a few percent once or twice per year.

In the fiscal year ended March 31, Takata posted a net loss of 30 billion yen ($245 million) after booking nearly 56 billion yen ($454 million) in recall-related costs. But that charge covered only 9.5 million of approximately 50 million inflators now subject to recall worldwide, according to The Nikkei.

Takata and 11 vehicle manufacturers are replacing some 34 million inflators in the U.S. alone. The devices appear to become more prone to misfiring if exposed to high heat and humidity over long periods, but the exact cause of the problem remains unclear.