Daicel and Toyoda Gosei Plan Capital Partnership to Expand Airbag Business

Japanese OEMs Daicel Corp. and Toyoda Gosei Co. have announced that they would be investing 1 billion yen (USD 8.98 million) in each other’s shares and strengthen their ties to further expand their global airbag businesses. Along the lines of the Nissan-Renault partnership, this would go a long way towards strengthening their individual positions.

Daicel makes inflators used in airbags, as well as polymer and plastic products. Toyoda Gosei is a Toyota Motor Corp. affiliate that makes airbag modules, steering wheels and other auto components. Ever since Takata has been badly affected by the recall of its inflators, both these companies have been able to grow their airbag-related businesses since a global recall of inflators made by Takata Corp. has snowballed since 2013.

As an outcome of the capital partnership, both companies would take a stake of about 0.3 percent in each other and collaborate on research initiatives to help them increase their global footprint.

Toyoda Gosei is based in Japan’s Aichi Prefecture which is the hub of the auto business in Japan. Toyota Motor Corp., has a 43 percent stake in the firm. Toyota also has a 4.3 percent stake in Daicel.

Daicel is based in Osaka and supplies inflators to Takata, which has turned into one of its biggest customers as it tries to cope with the demand for replacement inflators in the vehicles that are covered as part of the recall.

Daicel also supplies inflators to Key Safety Systems, the Chinese-owned, U.S.-based OEM that is in talks to acquire Takata. With more and more automakers shifting away from Takata, Toyoda Gosei has increased its sales to Honda, Toyota and other auto manufacturers.