Honda Motor Co. (HMC) revealed that it would recall 56,881 units of Acura TL sedans in North America due to a problem with their power steering hose. The company would recall 52,615 units in the U.S. and 4,266 units in Canada. The vehicles belong to the 2007–2008 model year.
The automaker noted that power steering hose in the vehicles are likely to deteriorate and leak over time. The leakage could lead to a loss of power steering causing smoke and fire in the vehicles.
The company has not yet received any reports of fires or injuries related to the problem. It said that the owners will be informed about the recall from mid-June.
Last month, Honda recalled 554,000 units of CR-V compact SUVs and Pilot large SUVs due to a problem with their headlight wiring. The CR-Vs belonged to the 2002–2004 model year and Pilots to 2003.
The automaker had 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.
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.
From 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).
The Zacks #2 Rank (Buy) company revealed a steep 61% increase in profits to ¥71.6 billion ($871 million) in the fourth quarter of the fiscal 2012 ended March 31, 2012 from ¥44.6 billion in the same quarter of the prior fiscal year. On a per share basis, profits were ¥39.72 (48 cents) in the quarter versus ¥24.72 in the prior year, missing the Zacks Consensus Estimate of 62 cents.
Consolidated net sales and other operating revenues grew 9% to ¥2.4 trillion ($29.3 billion), despite unfavorable foreign currency translation effects. The improvement was attributable to higher revenues from motorcycle and automobile businesses.
Consolidated operating profit more than doubled to ¥112.0 billion ($1.4 billion) from ¥46.2 billion in the fourth quarter of fiscal 2011, driven by increase in sales volume and model mix and lower selling, general and administrative (SG&A) expenses, despite higher research and development (R&D) expenses and unfavorable foreign currency effect.
For fiscal 2012, Honda has projected revenues to increase 30% to ¥10.3 trillion. Operating profit is expected to jump 168% to ¥620 billion and profits are anticipated to surge 122% to ¥470 billion or ¥260.78 per share. The company expects higher revenues, favorable model mix and effective cost reduction measures to contribute to the increase in profits during the year.
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