Takata dives 20% on report airbag recall costs could hit $24bn

Takata's shares plunged 20 per cent in Tokyo today after a report that the recall-related costs facing the Japanese airbag supplier could be as high as USD 24 billion.

Citing a person familiar with the matter, Bloomberg News said the company estimated the "worst case" scenario would involve the recall of 287.5 million airbag inflators at a cost of as much as 2.7 trillion yen (USD 24 billion).

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

The firm plunged 19.45 per cent to 414 yen, their daily loss limit, in response to the report published shortly before Japanese markets closed.

"The company has not announced this figure, and I don't know where it came from," a Takata spokesman said.

"(We) don't know how many cars are affected globally, especially in Europe and Asia, so I don't think it would be possible to make an estimate like that."

One Tokyo-based auto analyst, who asked not to be named, said the costs figure sounded "too high".

"We're not sure how it was calculated," he added.

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

At least ten deaths have been linked to the ruptures and some 50 million Takata airbags have been recalled globally, including some 28 million in the United States.

"It appears (Takata) is bracing for the increasing probability that it will be forced to recall many, many more inflators than have already been called back," Hans Greimel, Asia editor for Automotive News, told AFP.

"If US regulators aren't satisfied that their inflator chemistry is safe and require Takata to recall them all, the costs will skyrocket."

The figure would likely include not only the price of replacement inflators but also a string of other costs, including paying for the labour to install them and possible compensation for affected automakers, Greimel said.