Airbag maker Takata dramatically cuts profit outlook

Japanese firm Takata has cut its profit outlook by 75% after big carmakers began to drop its air bag inflators.

The firm now expects full-year profit of 5bn yen (£27m) instead of 20bn yen.

US regulators believe the volatile chemical used in the inflators, ammonium nitrate, can cause air bags to explode with excessive force.

The inflators have been linked to eight deaths, all in Honda cars, triggering the recall of tens of millions of vehicles worldwide.

Takata shares have lost nearly 40% of their value in three days after the firm was fined up to $200m (£130m) by US regulators and ordered not to use ammonium nitrate in its inflators.

Takata has said it would phase out the chemical, used in the majority of its inflators, by the end of 2018.

Honda, Toyota and Mazda have all said that they will no longer fit Takata inflators containing ammonium nitrate to new cars.

Fuji Heavy Industries, which makes Subaru cars, and Mitsubishi Motors are also considering dropping the parts.

But Toyota said it would consider other Takata inflators as long as they were safe.

"Even if they're made by Takata, we intend to take an unbiased approach [on other inflators] as long as we can confirm their safety," Toyota president Akio Toyoda said.