EuroWire July 2016

Transatlantic cable

airbags with such in aters, and until the end of 2019 to recall faulty bags installed as part of earlier recalls. Ms Tabuchi noted that replacing the faulty in aters poses “an enormous logistical challenge.” Not only are there shortages of parts in many areas of the USA, but automakers must also deal with consumers who face the prospect of driving potentially deadly cars while they await the repair. In some cases, she wrote, automakers have made loaner cars available. † Earlier, Mr Rosekind himself had touched on this aspect of the recalls. On 16 th March he told the Times that his wife’s car required a x to a faulty Takata airbag but that parts were not available. The chief American auto safety regulator said the experience had helped him know what people go through in an extensive recall. To that point, 14 automakers in the USA had recalled 24 million vehicles with Takata airbags, and about 7.1 million of the devices had been replaced. A spokesman for the German carmaker Volkswagen AG said on 10 th May in Beijing that VW and a joint venture partner – the state-owned China FAW Group Corp – would begin construction in Tianjin the following week for a plant with capacity to turn out 300,000 cars annually. The plant is due to be completed by 2018, Reuters was told. The spokesman declined to put a value on the project, but China Daily cited an FAW-VW joint venture o cial saying the investment was worth just under $3 billion. VW had previously announced that it planned to build a factory in the northern port city that would start production by 2018, but provided no details. According to the May disclosure the company is aiming for annual production capacity of ve million units by 2020. VW said last year it would hit that mark by 2019. Reuters reporters Jake Spring and Brenda Goh noted that the German automaker has broadly maintained its production in the world’s largest car market; this despite sluggish sales growth as China’s economy expands at its slowest rate in 25 years. “Generally, we stay on our investment plans, with some modi cations of course which is normal and which will always be done,” VW China chief Jochem Heizmann had told reporters in Beijing in April. He added, “We will use these capacities and have some more exibility to react.” (“VW China Venture to Break Ground on Tianjin Plant Despite Market Slowdown,” 10 th May) Mr Heizmann said ahead of the Beijing motor show in April that his company would invest $4.49 billion with its joint venture partners in China this year. In addition to its association with FAW-VW, the company makes passenger cars with SAIC Motor Corp Ltd, also Chinese state-owned. Dorothy Fabian USA Editor Volkswagen ignores the slowdown in China’s car market, sticks to its plan to invest $4.49 billion there this year

The United Kingdom is the second-largest UBI market in Europe, while the model remains a niche product elsewhere on the continent. IHS Automotive expects that in China, where in 2012 the government began granting foreign insurance carriers access to the market, around 15 insurers will launch UBI pilot programmes this year.

Automotive

It’s o cial: the Takata airbag failures are attributable to moisture and wide temperature uctuations over time

“This is the largest recall in American history,” Mark R Rosekind, who heads the National Highway Tra c Safety Administration, told reporters on 4 th May. The occasion was the announcement by the NHTSA that it would require the Japanese automotive parts maker Takata Corp to work with automakers to recall an additional 35 million to 40 million of the company’s airbags, bringing the number recalled in the United States to nearly 64 million. The move followed on the agency’s disclosure that, after three investigations and an inquiry, it had identi ed the cause of the defect that made the airbags rupture, sending metal fragments ying. At least 11 deaths worldwide have been linked to the defect, ten of these in the USA. The safety regulators reported their nding that long-term exposure to environmental moisture and wide temperature uctuations over time can degrade the propellant used to deploy the airbag, making it unstable and prone to explosion. In every such event in which an airbag made by Takata was implicated, the car was an older model. Three investigations by the agency found aws in the airbag’s propellant, which includes the compound ammonium nitrate and is enclosed in a steel casing called an in ater. Mr Rosekind said, “The science now clearly shows that these in aters can become unsafe over time, and faster when exposed to high humidity and high temperature uctuations.” As reported by Hiroko Tabuchi of the New York Times , Takata engineers struggled for years to stabilise the ammonium nitrate, a cheap and volatile explosive that is more commonly used in large-scale applications like mining. Eventually, they hit upon the expedient of a drying agent to help stabilise the compound. As well as the volatility of ammonium nitrate, for the NHTSA the age of the airbag emerged as an important factor. Takata’s in aters, even without the drying agent, apparently are safe when they are installed in a new vehicle, and for a few years afterward. But, Mr Rosekind said, “After time, they pose a risk and should be replaced.” (“Takata Airbag Defect Is Traced to Moisture and Temperature,” 4 th May) † The expanded recall stipulates replacement of in aters that use ammonium nitrate and do not contain a drying agent. Takata has until the end of 2018 to recall cars that have

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July 2016