While company officials insist that the existing dampers would not affect the performance of the vehicle, over a period of time it could lead to oil leakage and affect performance, officials said.
The car major has been sending letters to its customers to bring their cars to Honda dealerships for free replacement of the dampers.
The company conducts rigorous tests on all the components of all its vehicles on an ongoing basis with Honda Motor Co Japan to ensure that the highest standards are maintained, the company said. Says a company official, “As part of a proactive action, in one of these tests conducted for the new City, a batch of front dampers was found to fall short of Honda's stringent global standards.”
The new City has seen its sales surge since its launch and Honda Siel has also improved marketshare from 2% in the April-May '03 to 3.5% in the April-May '04 period.
The compan, which has been clocking operating profits for the past two years, will wipe out its entire accumulated loss worth Rs 75 crore by turning in a net profit of Rs 80 crore in fiscal 04-05, up from Rs 60 crore last fiscal.
Honda Siel's balance-sheet clean-up has been helped by a spurt in sales. The company's Greater Noida facility has been producing 106 units a day since November 17, which is close to its maximum capacity, for the first time in six years of operation. A proposed expansion will take the company's total capacity to 40,000 units per annum.
Honda has joined Toyota and issued a recall for certain vehicles, this is not a great start to 2010 for both Japanese carmakers and as a result has affected their share prices. The Honda recall involves 646,000 Fit/Jazz and City Cars.
These vehicles have to be recalled because of faulty window switches. In some cases they can overheat if they have been exposed to liquid, there are three things that could happen, there could be a huge amount of smoke in the interior, the switch could melt and even catch fire.
According to The Wall Street Journal, only 10% of Fit hatchbacks will need the window switch replaced, the other 90% will just need waterproof skirts fitted to stop liquid seeping in. There was a report last year of a child dying because of a fire taking place in one of the affected vehicles due to this fault.
There are to be 171,372 recalled in the UK, 141,140 in the U.S. and 229,000 in Latin America. Those affected models are built in Brazil, China, India, Japan, Thailand and Malaysia. A strong Yen is already affecting Japanese companies who export; this latest recall will not help either Honda or Toyota.
U.S. carmakers have already started to benefit from this latest recall of Japanese vehicles; we recently reported that GM is offering incentives to Toyota owners. Ford is certain to see an increase in sales as well, not that they need a helping hand; profit has been very healthy for the Blue Oval.
