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Honda Recalls 2.5 Million Vehicles

Honda Motor Co announced on Friday it is recalling almost 2.5 million cars, SUVs and minivans around the world to repair a software problem that can lead to damage to the automatic transmission system.  The recall includes about 1.5 million vehicles sold in the US, 760,000 in China, and 135,000 in Canada.  Earlier in the week, Consumer Reports announced that it was no longer including Honda's popular Civic sedan, prompting some analysts to speculate that there might be some significant issues at Honda.

A spokesman for Honda, Chris Martin, said the recall is not a sign of big problems at the carmaker, but is a result of some “extremely unusual circumstances.”  “The far majority of our consumers would never really encounter this,” Martin added.  “It's software programing. It's not a weakness in the transmission per se.”  Industry insiders, meanwhile, say that the recall is not a huge problem and the carmaker should recover.

Since Toyota recalled more than 14 million vehicles starting in 2009, the entire industry has been paranoid about explaining recalls.  Before the well-publicized Toyota issues, most automakers tried to hide recalls by fixing problems with internal bulletins to auto dealer service departments.  Through July, Honda's US sales were down by 2.6 percent, mainly as a result of the supply chain disruptions caused by the March 11th earthquake and tsunami in Japan.  Overll sales in the US over the same time were up about 11 percent.

The US market is vital to Honda, accounting for about a third of its total sales and even more of its profit.  The company ranked fourth in the US in sales last year, and has seen that rank drop to sixth through the first half of 2011.  The recall announced Friday affectes four cylinder Accord sedans made between 2005 and 2010, CR-V crossover vehicles made between 2007 and 2010, and Element SUVs made between 2005 and 2008.

The problem involves software that interacts with the automatic transmission, which can be damaged if a driver quickly shifts between gears.  The issue can cause the engine to stall or make it difficult to put the vehicle in park.  Honda said the problem could happen if drivers shifted quickly between reverse, neutral and drive, like they might do if they were stuck in mud or snow.  Honda said it will begin informing car owners at the end of August.  The company declined to offer an estimated cost for the recall.