Honda Motor Co., Ltd. is a Japanese public multinational corporation known for manufacturing of automobiles, motorcycles and power equipment. (Photo : Reuters)
Things are going from bad to worse for Japanese car manufacturer Honda. The company was recently forced to recall millions of its cars due to defective airbags and now its president is stepping down. Honda president Takanobu Ito is set to step down when the fiscal year end on April.
The airbag issue which has now been linked to at least five deaths has seriously hurt Honda's revenue. During the fourth quarter of 2014, Honda's earnings took a 15 percent dive which amounts to at least $1.2 billion in total losses.
The airbag problem did not only hurt Honda's revenue but has also smeared the company's worldwide reputation as a producer of safe and products with excellent quality. Despite the problems faced by the company, it still released a positive forecast for the current fiscal year. According to the report, Honda's sale will rise from 4.3 million on 2014 to 4.45 million for the current year.
President Ito will be replaced by Honda managing officer Takahiro Hachigo. The incoming president has been with the company for 33 years. Under Hachigo's guidance, the automaker was able to venture in other markets including China, Europe and the United States. Hachigo also led the development of the Honda Odyssey, a minivan that was manufactured in one of Honda's several assembly plants stationed in America, according to NBC News.
During the announcement of Hachigo's appointment, Honda added that it will also make some minor management changes. However, the statement did not include any reference towards the airbag problems, according to BBC.
The reason for the massive recall of cars sprung from the Takata airbags installed on Honda cars. Although many car manufacturers uses Takata airbags, Honda has been the worst affected.
