Honda (HMC)
Honda Follows in Toyota’s Tracks
Honda Follows in Toyota’s Tracks
During a wave of recalls among others automakers, Honda Motor Co. managed to slide under the radar screen as focus shifted away from them. As additional reports came out about Toyota (TM: Charts, News, Offers), Honda owners became more confident than ever in their vehicles. Well the tables have finally turned on Honda and now the company is under the judgmental eye of consumers and the media. Honda Motor Co. said it is recalling about 412,000 vehicles to address a potential brake problem. The inability to properly stop a vehicle seems to be the common theme in most of these recalls. Will the company follow the same path as Toyota and end up the center of controversy? Does this recall have the ability to tarnish the company’s impressive reputation?
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Stock Analysis
Honda and Toyota have been considered the top players in the auto industry for years. Consumers have always turned to the manufacturers for safety and reliability. This is evident in the number of vehicles that both companies have on the road today. Despite all the problems that Toyota is currently having, it still holds the title of making one of the best selling vehicles ever, the Toyota Corolla. With all the issues surrounding braking and acceleration, consumers are starting to question whether these vehicles are truly as safe as they claim to be. Now that Honda has issued a recall, many are worried that this is just a starting place for other problems. Especially since the company already launched a separate recall involving close to 1 million Honda vehicles due to concerns about their air bags. Let’s not forget that Toyota’s recall started out much smaller and then ballooned into something bigger than most people expected. At this point, it is hard to tell if Honda’s latest recall will put the company into Toyota’s shoes.
The most alarming thing to consumers is the fact that the recall surrounds parts that can lead to major accidents or possibly death. Honda is recalling the vehicles to modify their vehicle-stability-assist modulators, some of which were assembled in a way that could allow air to enter the modulator. Over months or years that could result in such “soft” or “low brake pedal” issues. The recall includes 344,000 Odyssey minivans and 68,000 Element sports utility vehicles from the 2007-2008 model years in the U.S.
In a room full of people it’s not hard to find at least one person that swears by a Honda or Toyota. Honda has taken decades to build up its reputation as a dependable company. It will still have many loyal customers, but it may lose some due to these recent problems. Honda may be able to avoid tarnishing its reputation forever if it works quickly to address these problems and not wait as long as Toyota did. Honda will definitely have to put forth some effort to reassure consumers, but it is highly unlikely that the company will lose its top position. The company has temporarily found itself on a bumpy road, but it will bounce back. Shares of Honda managed to close up 0.2% after trading down earlier in the day.
Other Stuff on Honda
- Honda Unveils Sporty New Hybrid – Honda unveiled the all-new CR-Z hybrid vehicle, which is now available in Japan.
- Honda Drives toward Home Solar Hydrogen Refueling
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