Takata shares sink by a quarter, Mitsubishi says reconsidering inflators

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Shares in Japan’s Takata Corp (7312.T) fell by a quarter on Thursday as Mitsubishi Motors (7211.T) became the second automaker to question the safety of its air bag inflators, casting further doubts on the future of the auto parts supplier.

Mitsubishi Motors’ decision to consider switching away from the component – at the heart of a global recall scandal – came a day after Takata’s biggest customer, Honda Motor Co (7267.T), said it would no longer use the inflators.

A decline in inflator sales would hit already embattled Takata’s revenues: air bag parts contributed 38 percent of total sales last year. The company reports its first-half results on Friday.

Shares in Takata plunged 25 percent to a 6-1/2-year low on Thursday, extending its slide from the previous day and wiping some $320 million from its market capitalization since Monday.

U.S. regulators say the component uses a chemical propellant they suspect causes the air bag to explode with too much force, spraying metal shards into the car. The inflators have led to the recall of tens of millions of cars worldwide and regulators have linked the component to eight deaths, all on Honda’s cars.

On Wednesday, Toyota Motor Corp (7203.T) said it would take further action on the inflator issues as necessary, while Nissan Motor Co (7201.T) said it would defer to U.S. regulators on actions related to Takata.

The founding Takada family owns about 60 percent of Takata, while Honda holds 1.2 percent. On Wednesday, the company said it would pay the $70 million fine imposed by the U.S. National Highway Traffic Safety Administration (NHTSA) in installments, and phase out, as ordered, the use of potentially volatile ammonium nitrate as a propellant in its air bag inflators.

($1 = 121.5000 yen)

(Reporting by Chang-Ran Kim and Maki Shiraki; Editing by Stephen Coates and Miral Fahmy)

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