Takata Looks Way Past Its Air Bag Woes

One might think that an auto parts company whose main product is at the center of a 19-million-vehicle recall involving a dozen carmakers would have its hands full. But Takata, the Japanese maker of air bags that killed nine motorists and injured about 100 more, is turning toward the burgeoning field of driverless cars—a market that may be worth $42 billion annually by 2025, estimates Boston Consulting Group.

Autonomous vehicles pose a threat to Takata and other auto safety suppliers because such cars could eventually render steering wheels obsolete, and sharply decreasing crashes would undermine the need for seat belts and air bags. Those three products account for 86 percent of Takata’s sales. Nevertheless, says Kirk Morris, vice president for engineering, Takata has signed up automakers to buy its safety products for autonomous cars starting late this year. “The whole industry is trying to grapple with how to keep their chips in the game and a seat at the table,” says Scott Upham, founder of Valient Market Research. “Takata is trying to take their core capabilities and plug them into the new reality, which is autonomous driving.”