Honda president to step aside following record vehicle recalls

Tokyo

HONDA Motor Co's Takanobu Ito will step aside as president of Japan's third-largest carmaker after quality lapses led to record vehicle recalls last year.

Mr Ito, who has headed the company for six years, will become an adviser, though he'll remain on Honda's board, the maker of the Accord sedan said in a statement. Mr Ito, 61, will be replaced by managing officer Takahiro Hachigo, 55, with the changes occurring in June, according to the company, which was planning to hold a briefing later to discuss the changes.

The management overhaul comes weeks after Honda cut its profit forecasts for the second time in as many quarters after recalls tied to flawed Takata Corp air bags and the new hybrid systems in its best-selling Fit compact car and Vezel SUV.

The carmaker's worst quality issues in decades have derailed plans to introduce new models and led Honda to project its first profit drop in three years.

Mr Hachigo, who began his career at Tokyo-based Honda in 1982 as an engineer in the area of chassis design, was responsible for developing the US-built Odyssey minivans that were launched in 1999, as well as the CR-V sport utility vehicle in 2001. His career led him to executive roles across the US, Europe, China and Japan before he was promoted to managing officer last year.

NSX chief Mr Ito, who has been president since 2009, joined Honda in 1978, also as a chassis design engineer. Mr Ito is credited with being in charge of developing the all-aluminium frame structure for the NSX sports car that went on sale in 1990.

More recently, beset by the biggest quality problems under his stewardship, Mr Ito pledged to bring the company back to basics and scrapped Honda's target of selling six million vehicles annually by 2017 because the pressure to reach the objective contributed to quality lapses.

Honda has called back 14 million vehicles worldwide since 2008 to replace air bags made by Takata, in which it has a 1.2 per cent ownership stake. The defective air bags, which can rupture during deployment and propel metal shards at passengers, have been linked to five fatalities in the US and the deaths of a pregnant woman and her unborn child in Malaysia.

While the Takata recalls affected at least nine other carmakers, scrutiny of how Honda responded to the flaws led to the US government slapping the company with a record US$70 million fine for failing to report more than 1,700 death and injury incidents to regulators over 11 years.

Honda's quality problems go beyond air bags. The carmaker has called back the Fit - its top-selling model in Japan - five times since its introduction in late 2013, and recalled its Vezel crossover three times. Those fixes delayed the roll-out of other new vehicles by as long as six months.

After the fifth Fit recall, Honda created a new position of executive officer in charge of auto quality and appointed Koichi Fukuo to take charge.

Among other executives, Takashi Yamamoto, currently in charge of production, and Yoshiharu Yamamoto, head of Honda R&D, will step down, the company said.

Honda fell 0.9 per cent to close at 3,928.50 yen (S$44.90) in Tokyo. The company made the announcement as the market closed at 3pm. BLOOMBERG