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Honda profit targets tumble in wake of Takata scandal

Takata's massive airbag inflator recall will likely do some damage to Honda's bottom line this year, according to the Japanese automaker's latest forecasts. The company will allocate 50 billion yen ($425 million) to fulfill costs related to the safety campaigns, Reuters indicates. The decision will reduce estimated operating profit by about 6.5 percent to 720 billion yen ($6.1 billion US) for the fiscal year ending March 31. In addition to lower profits, Honda also cut back its sales estimate for the year to 4.45 million vehicles from the previous 4.62 million, according to Reuters. This was largely due to lower-than-expected demand in Japan. "We are not seeing a big impact on sales in North America from the airbag issue," company vice president Tetsuo Iwamura (pictured above) told Reuters. The decreased forecasts come at the same time as the possibility of another death in a Honda vehicle from the Takata parts. According to Automotive News, a man in Florida died in a crash in his 2002 Accord, but investigators have not yet determined whether the inflator was the cause. However, the vehicle was included in a 2011 recall for the part and was not repaired. The family intends to file a lawsuit alleging the inflator ruptured, spraying metal shrapnel into the driver's neck. Reportedly, the owner was never notified of the recall. While the Takata inflator recall is affecting many companies with alleged links to at least five deaths and 139 injuries worldwide, Honda has it among the worst. Including vehicles covered under the previous regional repair campaign for the issue, the automaker needs to repair roughly 5.4 million vehicles just in the US. Honda has taken action by employing suppliers other than Takata to supply some of its replacement parts for the recall. The business is also reportedly switching airbag suppliers for the next-gen Accord and possibly the 2016 CR-V and Odyssey.

Honda exec says US market near capacity, could hurt subprime buyers

Is there a point in the US auto industry where companies should start considering the welfare of their customers ahead of selling more cars? American Honda Executive Vice President of Sales John Mendel thinks that level exists, and we may be getting very close to it.
According to Automotive News, Mendel believes that finding more customers in the market could require pursuing subprime buyers and offering longer-term loans. However, he refuses to use those tactics. While selling models this way can improve things briefly, the strategies hurt resale prices and lower vehicle profits over time. The company won't do "stupid things in the short-term that damage the person who bought yesterday," he said to Automotive News. "It's a very, very short-term tactic especially in the subprime area."
American Honda, which combines the Acura and Honda brands, has seen market share decline from 9.7 percent to 9.1 percent through July 2014, according to Automotive News, and Autoblog's By the Numbers stats showed it posted falling sales in five of the seven months with data this year. Though, Mendel claims that was partially because the company focused on retail sales over fleets. The delays of the launches for the Honda Fit and Acura TLX likely didn't help either.

Honda Smart Home, NJ dealer show the power of solar

Car dealerships are not usually thought of as "green" enterprises. They sell, after all, the fossil fuel-powered vehicles that account for about 18 percent of the CO2 emissions created in the US each year. As demonstrated by Rossi Honda in Vineland, NJ though, it doesn't have to be that way. Sure, the franchise still sells cars - lots of them - but they power the entire operation with sunlight in a way that provides ancillary benefits. The franchise has installed over 900 solar panels to become electric-grid neutral. Owned and operated by the seemingly indefatigable Ron Rossi, the franchise has installed over 900 solar panels to become electric-grid neutral. They aren't plastered across the roof of the showroom and service center, though. Instead, the array is mounted on canopies over his inventory, protecting them from sun, snow, and hail. Costing about $1.3 million to install, Rossi expects the system to save twice that amount in electricity bills over its 25-year life expectancy. Not bad, right? It makes us wonder why all dealerships don't do this. Honda itself recently completed its own solar project. The super-efficient Honda Smart Home is equipped, not only with its own beefy 9.5-kW solar array, but also with a 10-kWh lithium battery-based stationary storage system to buffer the building's electricity. Amongst its many party tricks, the home incorporates a DC-to-DC charging set up that allows the complimentary Fit EV to charge with half the efficiency losses of a typical home charging unit. While the installation is quite impressive and will serve as a "laboratory" of sorts for different groups involved with the project at the University of California, Davis, we can't help but wonder if the Japanese automaker couldn't get a bigger bang for its environmental buck elsewhere. A program, perhaps, to help its many franchise dealers to take up the Rossi challenge and go grid neutral. You can watch Rossi show off his array and other increased efficiency efforts by scrolling below for a pair of videos: one from Honda and one produced by Automotive News. As a bonus, we have time-lapse footage of the Honda Smart Home going up accompanied by press releases discussing both efforts. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. This content is hosted by a third party.