Honda Recalls SUVs - Analyst Blog
April 02 2012 - 7:00AM
Zacks
Honda Motor Co. (HMC) revealed that it would
recall 554,000 units of CR-V compact SUVs and Pilot large SUVs due
to a problem with their headlight wiring. The CR-Vs belong to the
2002–2004 model year and Pilots to 2003.
The automaker detected potential flaws with the headlight switch
in some of the vehicles. The flaw could lead to blacking out of
low-beam headlights, thereby increasing the risk of a crash.
However, the company has not yet received any reports of injuries
or crashes related to the problem.
Honda will begin notifying the vehicle owners in late April. The
dealers would inspect the headlight wiring and replace the
defective components if necessary.
Automotive safety recalls were brought into focus by media after
Toyota Motors’ (TM) announcement of the
largest-ever global recall of more than 10 million vehicles since
September 2010. The automaker made greater than 15 safety recalls,
more than any other automaker.
Recently, another Japanese automaker, Mazda Motor and its
three-party joint venture partners Ford Motor Co.
(F) and Chongqing Changan Automobile revealed their plans to recall
58,949 units of Mondeo sedans and 3,496 units of S-Max vehicles in
China. The recall was related to a problem with the anti-lock
braking systems that could cause false warnings. The joint venture
decided to replace the defective parts.
In 2011 till date, Honda’s largest recall included 1.5 million
cars in the U.S. due to a problem with the transmission system. The
recall included CR-V (model year 2007-2010), Elements (2005-08) and
Accords with 4-cylinder engines (2004-10).
Apart from vehicle recalls, Honda has been struggling with lower
sales and profits, adverse impact from earthquake and tsunami in
Japan as well as severe flooding in Thailand. In 2011, the
automaker’s sales dipped 6.8% to 1.15 million vehicles due to
production disruptions caused by parts supply shortages and plant
shutdowns on the back of the disasters in Japan and Thailand.
The Zacks #4 Rank (Sell) company reported a 41% decline in
profits to ¥47.6 billion ($613 million) or ¥26.45 (34 cents) per
share in the third quarter of fiscal 2012 ended December 31, 2011
from ¥81.1 billion or ¥45.01 per share in the same quarter of prior
fiscal year.
Revenues in the quarter dipped 8% to ¥1.9 trillion ($25.0
billion), driven by lower revenues due to disruptions in supply of
parts caused by the problems in Japan and Thailand and due to
continued appreciation of yen against dollar.
FORD MOTOR CO (F): Free Stock Analysis Report
HONDA MOTOR (HMC): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
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