TOKYO: The crisis surrounding Japan’s Takata deepened on Wednesday as its shares plunged on news that top client Honda was dumping it as an airbag parts supplier and US safety regulators slapped it with a record fine.
The stock fell nearly 20 percent in afternoon trading as investors reacted to the latest bad news for the embattled firm, whose airbags have been linked to at least eight deaths and scores of injuries globally.
It ended the day 13.4 percent lower at 1,189 yen ($9.80) a share, its lowest close this year.
Japanese financial markets were closed Tuesday for a public holiday, so Wednesday was the first time the company’s Tokyo-listed stock had been tested since the double whammy.
Takata’s airbag defect—thought to be associated with a chemical propellant that helps inflate the devices—can cause them to deploy with explosive force and send metal shrapnel hurtling toward drivers and passengers—in some cases killing them or leaving grisly injuries.
Some 19 million US vehicles, and millions more worldwide, are equipped with the airbags, which has led to massive recalls.
Accusing the company of dodging the issue for years, US safety authorities on Tuesday announced up to $200 million in penalties while Honda said it would stop using Takata airbag inflators.
“On a global basis, no new Honda and Acura models currently under development will be equipped with a front driver or passenger Takata airbag inflator,” the automaker said.
Hiroshi Shimizu, Takata’s senior vice president for global quality assurance, said it was studying the decision by Honda, which accounts for about 10 percent of the company’s global sales.
Takata’s revenue was about $5.3 billion in the last fiscal year.
“We want to understand their intention,” Shimizu said of Honda’s decision.
‘Surprised and disappointed’
The world’s top automaker Toyota—another Takata client—said it was monitoring the latest chapter in the crisis.
“We are continuing to investigate Takata-manufactured airbag inflator issues,” and will take necessary actions, it said in a statement.
Rival Nissan declined to comment on its future relationship with Takata.
But “we are obviously surprised and disappointed with Takata concerning the findings about its conduct” in the US regulator’s statement, its said.
A day earlier, the US National Highway Traffic Safety Administration said the auto parts maker had evaded reporting requirements, including making “the conscious decision” not to report two incidents to the regulator, despite a mounting death toll linked to its airbags.
The agency said Takata showed a pattern of such behavior dating back to 2009, both with the US government and with automakers who installed the airbags in their cars.
“For years, Takata has built and sold defective inflators. It refused to acknowledge that they were defective,” said Transportation Secretary Anthony Foxx.