TRW Automotive is moving ahead with plans to produce replacement inflators for Takata Corp. customers -- but only for automakers willing to offer guarantees of long-term business.
During a teleconference call today with industry analysts, TRW CEO John Plant said the company expects to start generating revenue from sales of replacement inflators late this year or in early 2016.
TRW already has found customers for its remaining spare capacity, Plant said, so the company will have to invest in new capacity to produce more inflators.
“We are working with several automakers to satisfy their needs,” Plant said. “We’re only willing to do that commensurate with new business which is guaranteed to be ongoing, rather than temporarily filling a hole for a competitor.”
Plant first indicated that TRW might produce replacements last year, when he indicated that the company had received an inquiry from Takata.
TRW is the third airbag supplier to line up contracts to produce replacement inflators. In October, Reuters reported that Japan-based Daicel would produce some replacements for Honda.
And in January, Autoliv Inc. confirmed that it has signed contracts with Honda and other unnamed automakers to deliver up to 25 million inflators to fix potentially defective airbags.
To fill those orders, Autoliv will build new production capacity at its factory complex in Utah. To cover the cost of that investment, a senior Autoliv executive said in December that the company wanted long-term commitments from automakers.
As its rivals ramp up new production capacity, Takata is rushing to expand its own factories. Earlier this week, the company confirmed that Takata plans to double monthly production of replacement inflators to 900,000 units by September.
That expansion follows Takata’s earlier decision to add two new production lines to its inflator plant in Monclova, Mexico. Those lines began running up to full capacity in January.
Even then, it will take time to produce enough replacements for ten automakers that have recalled vehicles to fix potentially defective airbags. Since 2008, roughly 24 million vehicles with Takata airbags have been recalled globally, according to Reuters' estimates.