TOKYO -- Japanese auto suppliers Daicel Corp. and Toyoda Gosei Co. said on Friday they will invest 1 billion yen ($8.98 million) in each other's equity, deepening ties as both companies expand their global airbag businesses.
Daicel produces inflators used in airbags, along with polymer and plastic products. Toyota Motor Corp. affiliate Toyoda Gosei makes airbag modules, steering wheels and other auto components. The two companies have been growing their airbag-related businesses since a global recall of inflators made by Takata Corp. has snowballed since 2013.
The companies would take a stake of about 0.3 percent in each other and discuss r&d opportunities that would enable them to further expand globally.
Headquartered in Japan's automaking heartland of Aichi Prefecture, Toyoda Gosei is a group company of Toyota Motor Corp., which owns a 43 percent stake in the firm. Toyota also owns a 4.3 percent stake in Daicel.
Osaka-based Daicel supplies inflators to Takata, which has become its biggest customer as the embattled Japanese airbag maker struggles to produce enough replacement inflators in the global auto industry's biggest ever recall.
Daicel also sells inflators to Key Safety Systems, the Chinese-owned, U.S.-based components maker that is contemplating an acquisition of Takata.
Airbags and other safety-related products accounted for 28 percent of Toyoda Gosei's annual revenue last year, up from 27 percent the previous year.
It has been increasing airbag sales to Toyota, Honda Motor Co. and other automakers in the last few years, as an increasing number of automakers shift away from Takata.