Air bag maker seeks shelter


 Image result for takata airbag

Takata Corp. files for bankruptcy in Japan, United States.

DETROIT — Drowning in a sea of lawsuits and recall costs, Japanese air bag maker Takata Corp. filed for bankruptcy protection in Tokyo and the United States early today.

The company announced the expected action this morning Tokyo time. Takata confirmed that most of its assets will be bought by rival Key Safety Systems, based in suburban Detroit.

Takata was done in by defective air bag inflators that can explode with too much force, spewing out shrapnel. They’re responsible for at least 16 deaths and 180 injuries and have touched off the largest automotive recall in U.S. history. So far 100 million inflators have been recalled worldwide including 69 million in the U.S., affecting 42 million vehicles.

Key will buy most of Takata’s assets for $1.6 billion and take over its manufacturing operations to make seat belts, air bags and other automotive safety devices, according to two people briefed on the matter.

Some remnants of Takata will be folded into an entity with a different name to keep manufacturing inflators used as replacement parts in recalls, said the people, who didn’t want to be identified because the bankruptcy terms have not been made public. being handled by 19 affected automakers, will continue.

At the end of April, only 22 percent of the 69 million recalled inflators in the U.S. had been replaced under the recalls, leaving almost 54 million on the roads, according to the National Highway Traffic Safety Administration website. This means more inflators will likely explode and more people will be hurt in the future, lawyers say.

At least $1 billion from the sale will be used to satisfy Takata’s settlement of criminal charges in the U.S. for concealing problems with the inflators. It was unclear what the rest of money paid by Key will be used for. Key is owned by Ningbo Joyson Electronic Corp. of China.

One of the people briefed on the filings said that Key would get Takata’s assets “free and clear” of past or future liabilities. That makes it unclear whether anyone injured by inflators in the future would have any legal recourse against either company.

Categories: Automotive, Business, Cars

Toyota kills Scion

February 3, 2016 Leave a comment

ScionAccording to Motor Trend: Toyota has issued an official statement that Scion will be killed off and folded into the Toyota brand. The automaker said that the decision to kill off the youth-oriented brand was in response to customers’ needs and the fact that Toyota’s newest vehicles are also appealing more toward the younger generation that Scion was aiming at.

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No Spare Tire

November 14, 2015 Leave a comment


Between a third and a half of the new vehicles sold in the U.S. this year (2016 models) will come sans spare, according to The Detroit Bureau,  Instead, manufacturers are opting for alternatives like tire inflator kits or run-flat tires, the latter designed to keep running for as much as 50 miles even if they lose pressure.

Categories: Automotive, Cars

Over One-Third Of Teens Do Not Drive

October 29, 2015 Leave a comment
  • Over one-third of U.S. teens today do not have a driver’s license, more than double the share without a license in 1985.
  • While Americans have long had a love affair with their automobiles, this special relationship could be changing, particularly among young Americans. The two strongest factors reshaping attitudes of young Americans toward vehicle use are environmental concerns and social media.
  • Over one-third of Americans 18 to 30 years old believe reduced vehicle use will help improve the environment. This is important since environmental preservation is among the top three values among Americans 10 to 30 years old.
  • Social media is causing many Americans 30 years and younger to believe travelling to friends is unnecessary, since they can interact with friends through social media from virtually any location.
  • The combination of environmental concerns, social media, and other cultural factors is dampening the interest of many young Americans in driving, as reflected in the growing percentage of teenagers in the U.S. without a driver’s license.
  • As a result of the changing attitudes of many younger Americans, vehicles could evolve over the next several decades (in the minds of consumers) from a product which is owned into a service which is hired or shared. Vehicle sharing (a stepped-up version of Uber) along with driverless vehicles could change how Americans use and own vehicles as well as the design of vehicles. All this has implications for the aftermarket.

Source:  Lang Automotive Aftermarket iReport

US Auto Sales headed for a 10 year high

According to Autodata, auto sales rose at an annualized pace of 18.17 million during the month, a 10-year high.

United States Total Vehicle Sales

The endangered car dealer

In 25 years, half of the people will be sharing autonomous cars.
ByJerry Hirsch Los Angeles Times
car lot

   Times have mostly been good for U.S. auto dealers since the recession.   Those that survived picked up business from those that didn’t. They reorganized their operations to be leaner and more efficient. Auto sales soared 59 percent to 16.5 million last year from the 2010 low point.   But reports from two different analysts say that dealers better start preparing for stormy, disruptive weather.   Looking several decades out, expect auto sales to plunge, Brian Johnson, an analyst at Barclays Research, recently told auto industry investors.   This will be caused by the rise of autonomous, or robotic, cars.   Looking forward 25 years, Johnson says about half of people will still buy vehicles for driving in rural areas and for jobs that require driving. Everyone else — people who use vehicles purely as a means of transportation — will be sharing autonomous cars.   That would slash annual U.S. auto sales to 9.5 million.   “A historical precedent exists — horses once filled the many roles that cars fill today, but as the automobile came along, the population of horses dropped sharply,” Johnson said.   He estimated that such a transition would force manufacturers “to shrink dramatically to survive,” with General Motors and Ford slashing North American production by up to 68 percent and 58 percent, respectively. Such a reduction could turn thousands of auto dealerships into surplus real estate.   Meanwhile Adam Jonas of Morgan Stanley Research is telling investors to expect a massive consolidation among new and used-car dealers and the service business.   “The U.S. auto retail pie is worth nearly $1 trillion split roughly 10,000 ways,” Jonas said.   “Putting aside dealer franchise laws … just given the technological changes we anticipate hitting the automotive industry, we think there could be some room for a bit of consolidation here,” he said, predicting the business will fall to “as few as tens of groups in the future.”   Much of this will come from people bypassing dealers.   “As consumers move from owning cars to sharing cars, auto retailers will face fundamental changes to their place in the mobility ecosystem,” Jonas said.   This will raise legal questions as dealers attempt to use the patchwork of state franchise laws to protect their turf.   Efforts by dealer groups in various states to limit Tesla Motors’ move to bypass car dealers and sell its vehicles through company-owned stores is an early example of this tension.   Other analysts are already pointing to the lawsuit filed earlier this month by the California New Car Dealers Association against TrueCar Inc., which operates a digital platform for car sales, as an example of dealers attempting to protect their business from technology-based interlopers.   “If a tech firm were to operate a fleet of say 10 million cars in a pay-by-the-mile or by-the-minute model, would such a business fall under the umbrella of current dealer franchise laws?” Jonas said.   “It’s a gray area. But as this issue attracts broader scrutiny and analysis, we expect the gray to become black-and-white rather quickly.”

Categories: Automotive, Business, Cars

Faulty Takata airbags in junkyards

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