The car valuation of the majority of the Toyota fleet is gradually falling due to the deadly consequences of the glitch in the mechanism of air bag deployment. The said air bags are supplied by Japanese company Takata Corp. The exact cause of the problem is yet to be ascertained and this has various car makers who are doing business with Takata Corp scratching their heads in search of a lasting solution.
The air bag inflators have so far been pointed out as the source of the problem. A chemical within that is responsible for the inflation can do so with too much force thus sending shards flying into the cabin placing the occupants at very high risk of injury. 6 deaths and 100 injuries have so far been linked to the Takata air bag.
Takata agreed to broaden the recall for vehicles with its air bags which led the number to even out to a whopping 34 million units in the United States alone, with Toyota being just one of 11 car manufacturers tied to Takata. This puts the Japanese parts supplier smack in the middle of a potential crisis seeing as the production of enough replacement parts will take years as well as vast pools of financial resources.
In order to continue selling cars that the participants in the car market will be comfortable to put their friends and families in, some car makers are already lining up other suppliers for the air bags. For some this is out of the question because their car models were designed to work around the Takata air bag.
Takata’s coffers are taking a major hit and are yet to stem that financial bleed. Added to the fiscal loss due the extent of the recalls totaling $4 billion, the lawsuits are projected to take out another billion dollars. Since the exact problem has not been pin pointed, the replacement air bags may develop the same problem in the future resulting in more bad business for the company.
