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Honda (HMC) to Recall Nearly 97K Avancier Models in China

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Honda Motor Co., Ltd. (HMC - Free Report) has announced that it is going to recall 96,900 Avancier models in China due to a cold-climate engine issue, per Reuters. Honda Avancier is a mid-sized crossover sports utility vehicle (SUV), which is manufactured at either of the two local joint ventures of Honda.

Further, the company is checking whether the same fault has affected its other two models — UR-V crossover SUV and Honda Jade. If the company gets confirmation regarding the same fault, it will announce actions to deal with the issue. Earlier, in 2018, the same issue impelled the automaker to recall 130,000 CR-V SUV models and 294,500 Civic cars in the country.

Engines in the faulty vehicles collect an abnormal amount of un-combusted petrol in its lubricant oil pan, which result in a gasoline odor inside the car or lights up the check-engine option in the car.

Honda Motor Co., Ltd. Price and Consensus

 

Increased number of quality issues has slumped Honda's sales in China. In the month of July, China's sales declined 7.8% year over year to 105,960 vehicles. Moreover, during seven months — ending in July, the company’s sales have slumped 6.6% year over year to 715,060 vehicles in the country.

Price Performance

In the past three months, Honda’s stock has declined 8.6%, underperforming 6% decrease recorded by the industry it belongs to.

 

Zacks Rank & Other Key Picks

Honda currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the auto space are Meritor, Inc. , CarGurus, Inc. (CARG - Free Report) and Fox Factory Holding Corporation (FOXF - Free Report) . Meritor and CarGurus presently carry a Zacks Rank of 2 while Fox Factory sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Meritor has an expected long-term growth rate of 3%. Over a year, shares of the company have gained 12%.

CarGurus has an expected long-term growth rate of 5%. Shares of the company have risen 62% in the past year.

Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 60.4%.

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