Tag Archive | "Honda Motor Co."

Honda, Subaru Recalling 800,000 Vehicles


WASHINGTON – Honda Motor Co. and Subaru of America announced major recalls Saturday, collectively calling back more than 800,000 vehicles.

Honda said it is recalling 310,773 2009-2011 Pilot SUVs over some faulty driver and passenger seat belts. Honda said the seat belt anchor webbing may not have been properly completed during sewing and the seat belt anchor could detach, reported The Detroit News.

Honda said the first claim occurred in May 2010 of a seat belt anchor detaching and a second claim was made in July, prompting an investigation and recall. Honda will notify owners starting next month and dealers will replace the seat belts if necessary.

Subaru said it was issuing two recalls covering about 400,000 recalls. One covers 300,000 vehicles sold or registered in 20 states — including Michigan, Ohio, New York — and Washington, D.C., to replace potentially rusty brackets on the underside of the vehicles.

The recall covers the 2002-2007 Impreza, 2003-2008 Forester and 2005-2006 Saab 9-2x. Subaru said it had reviewed complaints of front lower control arms broken at hanger brackets due to corrosion caused by road salt.

Dealers will inspect the front lower control arms and will rust-proof them or replace them with new ones. Owners will be notified by early November.

The National Highway Traffic Safety Administration had opened an investigation into the issue in April after receiving seven complaints, including two failures on the highway at high speeds.

The second recall covers 195,000 2010-2011 Legacy and Outback to replace the windshield wiper bottom cover, which could catch fire or stop working.

Subaru said it received a complaint of smoke from a wiper motor in January and began an investigation. Owners will be notified by November.

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Most Japanese Automakers Report Weak July Production


TOKYO — Most Japanese automakers reported lackluster vehicle production and sales for July, underscoring ongoing malaise in the industry as it grapples with a strong yen, precarious global economy and recovery from the March 11 tsunami.

Worldwide production at Toyota Motor Corp. fell 6.1 percent from a year earlier to 594,614 vehicles, the company said Tuesday. Its domestic sales of passenger cars, trucks and buses tumbled more than 35 percent, and exports fell 5 percent due to weaker shipments to North America, according to The Detroit News.

Toyota, however, said its production returned to levels that were near to what it had planned before the March earthquake and tsunami struck Japan’s northeastern coast, wiping out auto parts suppliers.

The automaker is preparing to ramp up production in the coming months to make up for the capacity lost to the disaster. Between October and March 2012, the automaker plans to build an extra 350,000 vehicles.

The numbers were worse at Honda Motor Co., where global production tumbled more than 34 percent to 206,727 vehicles in July. It was the sixth straight month of decline.

Honda’s domestic sales of vehicles fell 31.5 percent and exports retreated more than 19 percent.

Standing above the crowd was Nissan Motor Co., which continued to gain momentum and set company records in July.

The Yokohama-based automaker recorded an almost 18 percent jump in worldwide output to 388,680 vehicles — its best-ever July performance. Production in the U.S. benefited from stronger demand for the Altima sedan, Nissan said.

Although Nissan’s Japan sales fell 17 percent in volume terms, global sales overall rose 8 percent. Exports surged more than 23 percent.

Among Japan’s other car makers, Suzuki Motor Corp. posted a 3.6 percent decline in global production to 228,147 vehicles.

Worldwide output at Mazda Motor Corp. fell almost 13 percent to 103,384 vehicles. At Mitsubishi Motors Corp., it declined about 5 percent to 97,862 vehicles.

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Honda May Cut Profit Forecast as Market Turmoil Threatens Sales, CFO Says


Honda Motor Co., Japan’s third- largest carmaker, said it may revise its full-year profit forecast when it announces first-half earnings in October, depending on how long the current market turmoil lasts.

A prolonged drop in U.S. equities will lead to a decline in consumption and delayed car purchases, Honda Chief Financial Officer Fumihiko Ike told reporters in Tokyo today. The company is also concerned the yen may strengthen to the low 70s against the dollar, further hurting earnings from exports, Ike said.

U.S. stocks yesterday sank the most since December 2008 and European stocks today retreated for an eighth day, the longest losing streak since 2003, according to Bloomberg. Federal Reserve policy makers will hold a one-day meeting today as last week’s downgrade of the U.S.’s top credit rating by Standard & Poor’s fuels speculation the world’s largest economy may be headed for a recession.

“The question is what will happen to the macro economy and whether the current turmoil will persist over a prolonged period,” Ike said. “This is a new scenario” not incorporated into Honda’s current forecast, he said.

Honda raised its full-year net income forecast by 18 percent to 230 billion yen ($2.98 billion) on Aug. 1 on a quicker-than-expected recovery from the March 11 earthquake. The carmaker is basing its fiscal year forecast on 80 yen to the dollar and 112 yen to the euro.

“In the U.S., consumers react to the market very quickly, so it’s very possible that the consumer mindset will turn negative, and that people will refrain from purchasing new cars,” said Yuuki Sakurai, president of Fukoku Capital Management in Tokyo.

The Japanese currency today rose to as much as 77 against the dollar as investors shunned the U.S. currency after Standard & Poor’s cut the rating on the U.S.’s long-term debt to AA+. The yen’s strength last week prompted the government to sell the nation’s currency for the first time since March 18. A stronger yen cuts the value of repatriated profits from exports.

The Tokyo-based carmaker can meet its full-year forecast announced on Aug. 1 if the yen returns to 80 yen to the U.S. dollar, Ike said. Multilateral intervention is needed to prop up the dollar as last week’s unilateral action has proven to be ineffective, he said.

Every one yen gain against the dollar cuts Honda’s operating profit by 15 billion yen. A one yen gain against the euro reduces profit by 1 billion yen.

Honda has hedged against the dollar at 80 to 81 yen through the fiscal second quarter, Ike said.

While Honda has been conservative in estimating the U.S. auto market’s overall demand at 12.4 million units this year, “we will have to see how big the shock will be,” Ike said. The biggest risk is a global “chain reaction” from the U.S. and Europe, particularly to Asian economies that are tied to the U.S. dollar, he said.

Honda expects its sales in North America this fiscal year to drop 5.7 percent to 1.38 million units, it said on Aug. 1.

“Honda and other Japanese carmakers have been making up for lost production after the earthquake at a faster pace than expected,” said Masatoshi Nishimoto, an analyst at consulting company IHS Automotive in Tokyo. “If the U.S. market stalls, they’ll have to put the brakes on exports.”

Honda fell 2.8 percent to 2,722 yen at the 3 p.m. close in Tokyo, while the Nikkei 225 Stock Average declined 1.7 percent.

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Honda Recalls 2.5 Million Vehicles on Software Issue


DETROIT – Honda Motor Co Ltd will recall 2.49 million cars, small SUVs and minivans worldwide, including its popular Accord sedan, to repair a software problem that could damage the automatic transmission.

The recall includes 1.5 million vehicles in the United States, about 760,000 in China and 135,142 in Canada, the automaker said on Friday.

This week, Consumer Reports said it was not recommending the 2012 Honda Civic. This led some industry analysts to ask if that was a symptom of larger problems at the automaker.

The company has said it disagreed with the influential U.S. consumer advocate’s assessment, reported Reuters.

Chris Martin, Honda spokesman at the company’s U.S. headquarters in California, said on Friday the recall was not a sign of deeper difficulties, but instead stemmed from “extremely unusual circumstances.”

“The far majority of our consumers would never really encounter this,” he said. “It’s software programming. It’s not a weakness in the transmission per se.”

Jesse Toprak, an analyst with TrueCar.com, said Honda should easily recover from the massive recall.

“The actual problem and the potential consequences of it are really not significant,” said Toprak. “It can affect the performance of your transmission only if you are stuck in mud or snow and you are rocking back and forth very quickly between gears, and the transmission software can’t keep up and you can potentially damage the transmission.”

He said that, after Toyota recalled more than 14 million vehicles worldwide starting in 2009, “automakers have been so paranoid” about explaining a recall.

Before the Toyota recalls, Toprak said automakers tried to hide recalls by fixing any problem with internal bulletins to auto dealer service departments.

Through July, Honda auto sales were down 2.6 percent in the U.S. market, in large part because of the supply crisis caused by the March earthquake and tsunami in Japan. Overall, U.S. auto industry sales were up 11 percent for the period.

The U.S. market is Honda’s most important, accounting for a third of global sales and even more of earnings.

Honda was sixth in the U.S. auto market through July, down from fourth for all of 2010.

The company reported a profit of 22.58 billion yen ($292.5 million) for the June quarter, but is adding inventory and expecting a sales boost in the second half of 2011, just as the U.S. and global economy faces greater uncertainty.

Honda’s U.S.-traded shares were up 1 percent at $36.65 in afternoon trading on the New York Stock Exchange, while the S&P 500 index .SPX rose 0.9 percent.

Globally, the recall affects four-cylinder Accord sedans for the model years 2005 to 2010.

The company is also recalling vehicles in parts of Europe, the Middle East, South America, Mexico and Puerto Rico. The recall did not affect vehicles sold in Honda’s home Japan market.

No injuries or deaths have been reported from the problem, Martin said.

In the United States and Canada, the recall also includes the CR-V crossover for the model years 2007 to 2010, as well as the small Element SUV from 2005 to 2008.

In China, the recall is mainly of Accord models and includes more than 160,000 Odyssey minivans from 2005 to 2009 and about 4,000 Spirior cars, which are based on the European version of the Accord, for the 2010 model year.

Without updating the software, the automatic transmission in these vehicles could be damaged if the driver quickly shifts between gears. That might cause the engine to stall or make it difficult to put the car into park.

Honda said the problems might arise if the transmission were quickly shifted between the reverse, neutral and drive positions. A driver might do this in an attempt to dislodge a vehicle in mud or snow.

The automatic transmission secondary shaft bearing could be damaged in this scenario.

An update to transmission control module software will ease the transition between gears and reduce the possibility of damage.

Honda will begin informing U.S. consumers at the end of August. It did not disclose the expected cost of the recall.

The software update will take about a half-hour, but U.S. customers might have to leave their cars at Honda dealerships for a longer period, Martin added.

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Automakers Reduce U.S. Incentives in April to Five-Year Low


Automakers reduced spending on discounts and incentives for U.S. customers in April by 14 percent to an average $2,320 per vehicle, the lowest in more than five years, as sales climbed.

Ford Motor Co. average spending on discounts and promotions declined 20 percent from a year earlier to $2,399, Woodcliff Lake, New Jersey-based Autodata Corp. said yesterday. Chrysler Group LLC lowered spending 23 percent to $2,806, and General Motors Co. reduced incentives by 8.1 percent to an estimated $3,068 per vehicle.

Industrywide light-vehicle sales ran at a seasonally adjusted annual rate of 13.2 million in April, Autodata said, accelerating from a year earlier and exceeding the 13 million pace that was the average estimate of 12 analysts surveyed by Bloomberg. Incentives are likely to continue dropping in the coming months due to Japan-related supply shortages, said Jesse Toprak, vice president of industry trends at TrueCar.com.

“The outlook for incentives is that they are going to be down dramatically,” Toprak, whose auto-pricing website is based in Santa Monica, California, said yesterday in a telephone interview.

General Motors Co. reduced incentives by $272, or 8.1 percent from a year earlier, to an estimated $3,068 per vehicle. Toyota Motor Corp., the world’s largest automaker, reduced spending $60, or 3.1 percent, to an estimated $1,885 per unit, Autodata said.

Honda Motor Co., fourth in the U.S. sales by volume, raised incentives to $2,171, 8.7 percent more than a year earlier, according to Autodata. Nissan Motor Co. reduced discounts by 33 percent to $1,998.

The last month that industrywide average incentive spending was lower was October 2005 at $2,204 per unit, David Lucas, an analyst for Autodata, said in an e-mail.

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Hyundai Sales Surpass Honda


Hyundai Motor Co., South Korea’s largest carmaker, boosted quarterly profit 46 percent as it won sales from Japanese rivals, outpacing Honda Motor Co., whose production was cut by last month’s record earthquake in Japan.

Hyundai increased net income to 1.88 trillion won ($1.75 billion) in the three months ended March 31 from a revised 1.28 trillion won a year earlier, the Seoul-based company said in a regulatory filing Thursday. The stock jumped 7.3 percent to the highest closing price since it began trading in 1975, reported The Detroit News.

“Chaos brings disorder, and that’s when you see changes in ranks among leaders,” said Lim Jeong Seok, head of equity at KDB Asset Management Co., which oversees the equivalent of $2 billion in Seoul. “The past financial crisis and the recent earthquake may be an opportunity for Hyundai to pass bigger rivals.”

Hyundai increased global vehicle sales about 9 percent last quarter from a year earlier after adding new models including the Grandeur premium sedan in South Korea and the Accent small car in China.

The carmaker might extend sales gains as Toyota Motor Corp., Nissan Motor Co. and Honda curtail production after the March 11 earthquake.

Honda, Japan’s third-largest carmaker, reported fourth-quarter profit that missed analysts’ estimates. The Tokyo-based automaker’s net income plunged 38 percent to 44.5 billion yen ($545 million) for the three months that ended March 31. Revenue fell 2.9 percent, while Hyundai’s gained 21 percent in the same period.

Hyundai boosted vehicle sales in the January-March period to 919,000, outselling Honda, whose global deliveries fell 1.6 percent to 860,000, according to the companies. A year earlier, Honda outsold Hyundai 874,000 to 842,000.

Japanese carmakers are working to restore full operations after the magnitude-9 earthquake and tsunami damaged parts factories and power plants, causing shortages of components and electricity. Honda said earlier this week it expects its global output to return to normal levels by the end of the year.

“Even if production comes back, sales may not” in Japan, said Yuuki Sakurai, president of Fukoku Capital Management Inc. in Tokyo.

“May sales, June sales may be close to zero as the companies won’t have much to sell.”

Honda’s sales drop in the fourth quarter was led by a 22 percent decline in Japan from a year earlier, when a government subsidy program for car purchases helped boost domestic sales. Deliveries rose 7.9 percent in North America to 356,000 vehicles and 0.4 percent in Asia, excluding Japan, to 238,000.

Honda’s output in Japan plunged 63 percent from a year earlier to 34,754 vehicles in March, the carmaker said earlier this week.

The company’s output of cars and parts in Japan will remain at 50 percent of regular capacity until the end of June.

“We are in a situation where our supply is short when demand for cars is increasing globally,” Managing Director Fumihiko Ike told reporters in Tokyo.

Honda declined to provide a full-year earnings forecast, citing the impact of the natural disaster on production.

The earthquake cost Honda 45.7 billion yen ($559 million) in the year ended March 31, the company said.

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