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Honda (HMC) Issues Recall for Rear Cameras and Takata Airbags

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Per Associated Press, Honda Motor Co., Ltd. (HMC - Free Report) will recall 1.4 million Honda and Acura vehicles in the United States. The cars will be recalled to replace faulty front passenger-side airbags manufactured by Takata. The recall is an effort by the company to stay ahead of the government’s planned vehicle recall for the defective airbags.

Of the five-phase recall plan set by National Highway and Transportation Safety Administration in 2016, this recall marks the fourth recall for Honda. Further, the company stated that it repaired more than 77% of the existing recalls. Honda has added that it is ahead of the schedule. Honda’s previous recall, consisting of 465,000 vehicles with the same issue, was in January 2018.

The defective Takata inflators are at risk to explode in a crash, spraying metal shrapnel into passenger compartments, causing fatal injuries. Reportedly, this technical snag resulted in minimum 180 injuries and 23 deaths worldwide.

Honda Motor Co., Ltd. Price and Consensus


On Sep 27, Honda announced another recall in the United States that comprises of 232,000 units of 2018 Accord vehicles and 2019 Insight hybrid models. The recall is due to flawed software of the rear camera display.

The rear camera display in the recalled vehicles fails to show images as it should do while the driver is putting the vehicle in back gear. The fault can be risky and doesn’t abide by U.S. requirements.

Apart from 232k recall in the United States, the company is recalling almost 3,000 cars in South Korea, more than 6,000 units in Germany and 14,000 in Canada.

Price Performance

In the past three months, Honda’s stock has gained 3.7%, outperforming 2.4% decrease recorded by the industry it belongs to.


Zacks Rank & Other Key Picks

Honda currently carries a Zacks Rank #1 (Strong Buy). A few other top-ranked stocks in the auto space are Oshkosh Corporation (OSK - Free Report) , Navistar International Corporation (NAV - Free Report) and Cummins Inc. (CMI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 18.3%. Over the past three months, shares of the company have gained 0.8%.

Navistar has an expected long-term growth rate of 5%. Shares of the company have increased 14.5% over the past six months.

Cummins has an expected long-term growth rate of 11.6%. Shares of the company have increased 10.5% over the past three months.

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