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Honda (HMC) to Recall 465K Vehicles Over Takata Airbag Issue

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Per Associated Press, Honda Motor Corporation (HMC - Free Report) is set to recall around 465,000 vehicles in the United States including Honda and Acura models. This recently made safety- related announcement is part of the extended recalls from last year on account of defective Takata air bag inflators.

The faulty Takata inflators are at risk to explode in a crash, spraying metal shrapnel into the passenger compartments, causing fatal injuries. Reportedly, this technical snag has resulted in minimum 180 injuries and 20 deaths in the United States.

Honda Motor Company, Ltd. Price and Consensus


At the same time, another Japanese auto giant, Toyota Motor Corporation (TM - Free Report) , also announced recalling an additional 601,300 vehicles due to flawed Takata airbags. The recalled models comprise Toyota and Lexus models.

Recently, the U.S. National Highway Traffic Safety Administration (NHTSA) reported that Takata will be recalling roughly 3.3 million inflators from various automakers.

As of June 2017, NHTSA had reported that only 35% of the recalled vehicles has been repaired. Further, per the agency, the phased recalls that had begun in May 2016 are expected to continue till December 2019.

By this late February, Honda will be informing the affected customers to take their vehicles to authorized dealers for free repair. While at the beginning of March, Toyota will be notifying its affected clients to get their vehicles fixed from authorized dealers.

Price Performance

Shares of Honda have gained 8.2% in a month, underperforming the 8.9% rise of the industry it belongs to.


Zacks Rank & Key Picks

Honda has a Zacks Rank #4 (Sell) while Toyota, a Zacks Rank #3 (Hold).

Two better-ranked stocks in the auto space are Oshkosh Corporation (OSK - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oshkosh has an expected long-term growth rate of 16.5%. In the last six months, shares of the company have surged 32%.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have climbed 7.7% over a month.

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