When we talk about a certain car model being the safest, we usually give credit to the manufacturer. But what most of us forget is that a vehicle is a sum of thousands of parts, parts that aren’t all made by the company that has its badge on the car. These components are made by external suppliers who specialise in particular fields. And many of these companies are so large that they have a monopoly on OEM supplies with almost all the major carmakers in the world.
One such is Takata, the Japanese giant that has virtually dominated the safety equipment and features scene over decades and has almost all the world’s major car manufacturers in its list of clients. For a company that started in the Thirties as a textile weaving firm, much like Toyota, it came into prominence during the Second World War when it supplied parachutes for the Imperial Army. When seat belts grew in popularity, Takata started producing these for automakers, and soon grew to become one of the largest suppliers of seat belts in the world.
Takata started growing exponentially in the Eighties once it started making airbags, first for Honda and then slowly establishing itself as the automobile world’s favourite airbag supplier. But last year, the brand saw its fortunes take a catastrophic hit as the National Highway Traffic Safety Administration (NHTSA) ordered what is the largest automotive recall in US history. Takata had to recall nearly 69 million airbags after it was found that faulty inflators led to several deaths. It came as a sharp blow to the company, and wiped out a major chunk from its share value. Analysts estimate that the costs incurred by the company as a result of this massive recall will be many times more than the value of its net assets, and that it will inevitably have to file for bankruptcy. Even if it survives, it will remain a stark reminder, like Firestone tyres, that it just takes one incident to bring a large corporation tumbling down.