Honda CE says company could miss target

The auto maker grapples with several major recalls, some of which have prompted product launch delays.

The practice of recalling cars might simply appear as normal to the outside world and though it is a norm in the automobile industry, it does leave its implications here and there and thus the recalls aren’t always an easy thing to manage. As noted by Honda’s CE, some major recalls have had so much effect as to cause a delay in product launches and it is being speculated that the car maker could miss its target of selling 6 million vehicles annually a year worldwide by the fiscal year ending in March 2017 as a result. At a news conference for a product launch in Tokyo, he said “I am pondering the keyword ‘6 million vehicles. The priority is to make our customers happy through products and services.”

Honda did quite well for this year and managed to make sales of 4.3 million vehicles globally but for what appeared to be unusual, the CEO Takanobu Ito for the first time hinted that the company might ultimately not achieve the aggressive target that he set two years ago. Honda’s redesigned Fit subcompact was launched in September 2013 and ever since then it has been recalled five times in Japan and as a result of this, Mr. Ito has taken a 20% pay cut for three months. The need to recall cars has come repeatedly and the frequency of this has led Honda to push back some product launches, including the remodeled Legacy, which is already sold as the Acura RLX in the U.S.

As far as the vehicles sold are concerned, Honda remains to be Japan’s third largest auto maker but it is finding difficult to maintain its position being at the center of another series of recalls. It wouldn’t be wrong to say that among the 10 auto makers that have been recalling millions of vehicles over potentially explosive air bags made by Takata Corp, an issue that is linked to four deaths, Honda has been the hardest hit. Ever since the year 2008, the company has recalled nearly 10 million vehicles globally.

“My understanding is that the analysis on the cause of this issue is moving forward” as Honda and other companies collect inflaters from southern U.S. states to conduct investigations, he said, referring to the regional recalls that auto makers are conducting in certain highly humid and hot U.S. regions. Mr.Ito made his first public appearance in front of the press on Monday since the round of recalls began in June. He says the recalls haven’t been as painful as the fact that the air bags in Honda cars have been involved in deaths and injuries.

source: wsj