Honda Motor Co. (HMC) plans to recall 310,773 units of 2009-2011 Pilot mid-size crossover SUV in order to inspect and replace the front seat belts of the vehicles.
The automaker detected some problems with the seat belts’ stitching due to improper manufacturing. There is a danger that belts may potentially come loose in a crash, increasing the risk of injury.
Honda has not received any reports of injuries or deaths due to the defect. The company asked the affected vehicle owners to take the vehicles to the authorized dealer for inspection when they receive a recall notice.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM) announcement of the largest-ever global recall of about 11 million vehicles since September last year. The automaker made greater than 15 recalls, more than any other automaker. They were related to problems associated with faulty accelerator gas pedals, slipping floor mats and defective braking systems.
At the beginning of this month, Honda recalled 962,000 cars globally in order to fix a problem with their power windows and computer systems. The recall involved 936,000 units of Fit and CR-V (including 80,111 units in the U.S.) and 26,000 units of CR-Z compact hybrids (including 5,626 units in the U.S.). No injuries have been reported related to either of the problems.
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 and a recent and harsh Consumer Reports review of its popular Civic compact car.
Honda, a Zacks #4 Rank (Sell) stock, posted a sharp 88.3% fall in profit to ¥31.8 billion ($394 million) or ¥17.64 per share (22 cents per share) in the first quarter of its fiscal year ended March 31, 2012 from ¥272.49 billion or ¥150.27 per share in the same quarter of prior fiscal year. The decline in profit was attributable to adverse impact from the earthquake and tsunami and Japan on March 11 and unfavorable currency translation effects.
Consolidated net sales and other operating revenues dipped 27.4% to ¥1.71 trillion ($21.24 billion) on the back of same factors outlined above, despite increased revenues in the motorcycle business. However, at constant exchange rates, revenues decreased 22.7% from the prior year.
Consolidated operating profit plummeted 90.4% to ¥22.6 billion ($280 million) from ¥234.44 billion due to lower sales volume and model mix, increase in fixed cost per unit as production output has reduced and the unfavorable foreign currency effect, despite a fall in selling, general and administrative expenses.
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