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Honda Recalls on the Rise

Maker announces third action of the month; topped U.S. recall list in 2011.

by on Feb.22, 2012

Honda's latest recall impacts about 46,000 2008 Odyssey minivans.

For a company known for its quality and reliability, Honda has been having a bad month.  The maker today recalled 45,800 of its Odyssey minivans because the gas-filled struts that hold up the rear hatch could fail unexpectedly leading to potentially serious injuries.

It’s the third safety-related service action since just the beginning of February and the fourth since the beginning of 2012.  The numbers are relatively small, all told the various recalls impacting less than 50,000 vehicles.  But they come quick on the heels of some decidedly more serious problems, including the December recall of 273,000 Honda and Acura products due to potentially defective airbag inflators.

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That’s an ongoing issue that has now ensnared millions of Honda vehicles and in 2011 helped drive Honda’s tally so high that it recalled more vehicles than any other manufacturer operating in the U.S. market.

In all, the industry recalled 15.5 million vehicles, a sharp decline from 2010 when the number nipped the 20 million mark.  Toyota, which led the recall list in 2009 and 2010 slipped behind Honda  which, in 2011, announced 15 separate service campaigns involving 3.8 million vehicles.

It marked a bad end to a difficult year, the maker struggling to maintain its sales and market share in the wake of the March 11 earthquake and tsunami that devastated the Japanese auto industry.

“To say last year was an incredible challenge would be a gross understatement,” said John Mendel, the maker’s top American executive, during a presentation at the Detroit Auto Show last month.

While production is effectively back to normal after the March disaster and the subsequent flooding in Thailand that further hurt output, the recent recalls raise questions about Honda’s grip on quality issues.

To be clear, the recalls of 2012 have been modest in terms of the units affected.  Today’s minivan recall, which impacts 45,800 Odyssey models produced in 2008 and 2009, is the largest so far this year.  Both the initial February 2nd side curtain airbag recall and the expansion of that service action last week impact less than 1,000 vehicles.  And only a few 100 late-model Ridgeline pickups were covered by another campaign launched because the mandated door stickers might show the wrong inflation pressure for their spare tires.

Nonetheless, Honda “needs to be worried,” said George Peterson, chief analyst with AutoPacific, Inc.  “The more word of this gets out there…the more sales they can lose.”

(NHTSA investigating supplier of airbags involved in four recent recalls.Click Here for that story.)

Like its primary rival, Toyota, Honda still tends to hold a place near the top of the quality charts, both in terms of off-the-line quality and longer-term reliability.  But the gap with its key competitors has been closing, noted Dave Sargent, vice president of J.D. Power and Associates, which found that domestic makers nearly caught up with their top Japanese rivals in the latest Vehicle Dependability Survey.

The VDS measures how well 3-year products are holding up in terms of “problems” per 100 vehicles.  Where Detroit products averaged 18 problems more than their import rivals in 20120110 that slipped to just 13 in the latest J.D. Power study.

For now, noted Sargent, Detroit makers are still struggling to get the recognition for the improvements they have made, perceptions typically lagging reality.

But that could be changing, AutoPacific analyst Peterson cautioned.  The firm’s surveys are already showing a decline in consideration for Honda – a term referring to the number of buyers who put a particular brand on their shopping list.  Toyota has also seen a slight decline, perhaps because of the well-publicized safety problems it had in 2009 and 2010, which it recalled more than 10 million vehicles – most to deal with an issue dubbed “unintended acceleration.”

Not everyone is quite as concerned.  IHS Automotive analyst Aaron Bragman contends that the big Toyota recalls actually desensitized American car buyers.  A recall, he says, “used to be unthinkable…for the Japanese makers. I don’t think it has the same shock value since the Toyota debacle of two years ago.

Bragman points to the strong sales for Honda and Toyota products in January, and says research suggests the two brands retain some of the highest loyalty rates in the industry.

But loyal Baby Boomers customers alone can’t sustain either brand, he acknowledges.  “The Millennials and Gen-X buyers largely haven’t made up their minds about which brands they’re going to be loyal to,” said Bragman, adding that “It isn’t going to help them (Toyota and Honda) any” to have a battery of headlines announcing their latest recalls.

Toyota appointed a U.S. quality czar two years ago to address its quality and safety issues.  Honda has stepped up its own efforts.  But the recent results are questionable and suggest the maker will have to redouble its efforts if it hopes to head off a serious image problem.

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