Takata shares plunge 20% on report recall costs could hit S$32.5b

Visitors walk past a logo of Takata Corp at a showroom for vehicles in Tokyo.
Visitors walk past a logo of Takata Corp at a showroom for vehicles in Tokyo.PHOTO: REUTERS

TOKYO (AFP) - Takata's shares plunged 20 per cent in Tokyo on Wednesday (March 30), after Bloomberg News said the embattled Japanese airbag supplier's recall-related costs could come in as high as 2.7 trillion yen (S$32.5 billion).

Citing a person familiar with the matter, Bloomberg said the company estimated the "worst case" scenario would involve the recall of 287.5 million airbag inflators at a cost of 2.7 trillion yen.

Takata and its automaker clients are still hashing out how the costs would be shared, the unnamed source said.

A company spokesman was not immediately available to comment.

In response to the report, published shortly before markets close, Takata shares plunged 19.45 per cent to 414 yen, its daily loss limit.

The whopping estimate comes as Takata struggles to deal with the inflator defect that can cause airbags to deploy with explosive force, sending metal and plastic shrapnel hurtling towards drivers and passengers - in some cases killing them or causing grisly injuries.

At least 10 deaths have been linked to the airbag ruptures, and already some 28 million Takata airbags have been recalled in the United States alone.