Honda Motor Co. is not aiming anymore to sell 6 million vehicles annually by 2017, as the Japanese carmaker’s effort to achieve that target contributed to the quality lapses that led to huge recalls in 2014. Honda chief executive Takanobu Ito also announced that the carmaker won’t set a global sales target in its next midterm plan.
Honda once again trimmed its forecasted profit for the current fiscal year following recalls linked to defective Takata Corp. airbags and to new hybrid systems in the Fit compact car and Vezel SUV. These quality issues have: forced Honda to delay plans to introduce new models; caused its CEO to take a pay cut; and prompted the carmaker to forecast lower profits in three years.
Ito has vowed to Honda back to basics and indicated that the carmaker will no longer focus business expansion as its main goal. Ito said that Honda does not plan to rescue Takata financially and will collaborate with its suppliers to determine the root cause for the airbag defects as it seeks to put an end to the crisis.
In 2014, Honda recalled around 5.4 million vehicles with possibly defective Takata airbags in the United States. The defective airbags have been linked to deaths of four persons in the US and of a pregnant woman and her unborn child in Malaysia – all involving Honda vehicles.
The US government had fined Honda $70 million fine for its failure to report over 1,700 death and injury incidents to regulators in a span of 11 years.