Honda Motor Co.
) announced that it would recall 45,747 units of Odyssey minivans
due to a problem with their power tailgates. It has been revealed
that the power tailgates, when open, can drop unexpectedly,
potentially injuring anyone standing underneath. So far, the defect
resulted in two minor injuries caused by falling tailgates.
The recall affects Odysseys from the model year 2008 and 2009,
which are equipped with power rear lift gates. Honda decided to
begin the safety recall on March 13. The automaker will replace the
parts in the power lift gate at no charge.
Odyssey's sales have been disappointing in the recent months. In
January, the minivan's sales dipped 2% to 6,898 units.
Automotive safety recalls were brought into media focus after
) announcement of the largest-ever global recall of about 11
million vehicles since September 2010. 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.
Since 2011, 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 harsh Consumer Reports review of its popular
Civic compact car.
In 2011, Honda'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 twin disasters in Japan and
severe floods in Thailand.
Sales of Honda's CR-V small sport-utility vehicle grew 7.2% last
year. However, sales of midsize Accord sedan ebbed 17% to 235,625
vehicles and that of smaller Civic fell 15% to 221,235 vehicles in
In the second quarter of its fiscal year ended September 30,
2011, the Zacks #1 Rank (Strong Buy) company saw a 55% decline in
profit to ¥60.4 billion ($788 million) or ¥33.53 (44 cents) per
share in the second quarter of its fiscal 2012 from ¥135.9 billion
or ¥75.24 per share in the year-ago period.
Consolidated net sales and other operating revenues in the
quarter dipped 16% to ¥1.89 trillion ($24.60 billion) due to the
disaster in Japan and unfavorable currency translation effects. At
an unchanged exchange rate, Honda's revenues would have decreased
Consolidated operating profit slashed 68% to ¥52.51 billion
($685 million) from ¥163.47 billion ($782.07 million). The decrease
was attributable to lower sales volume, unfavorable model mix,
increase in fixed costs, higher raw material cost and unfavorable
foreign currency translation effect.
The automaker could not provide any guidance for the fiscal year
ending March 31, 2012 as it needed to evaluate the extent of the
damage resulting from the severe floods in Thailand, which caused
damage to inventories, and machineries and equipments of the
company's consolidated subsidiaries and affiliates including Honda
Automobile (Thailand) Co., Ltd.
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