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Season of Recalls for 3 Auto Giants

Stocks in this article: GM HMC

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- A number of big automotive companies have announced that they will be recalling select cars in April after discovering minor faults.

Although recalls are fairly frequent among automotive companies, the announcement of recalls by three companies in a quick succession has raised questions on the testing and manufacturing ability of these companies.

Honda (HMC) has indicated that it will recall about 554,000 sport utility vehicles in the U.S. to inspect for faulty wiring in headlights while General Motors (GM) has plans to recall 6,159 big vans and sport-utility vehicles in the U.S. for possible loss of steering. Porsche (Xetra: PAH3) has announced a recall of 1,232 2012 model-year 911 Carrera S coupes for possible interference between a coolant line and fuel line may cause the latter to become disconnected.


Honda's recall is limited to CR-V SUVs from model years 2002 to 2004 and Pilot SUVs from model year 2003. It will check for faulty wiring in headlights and then replace parts of the headlight wiring system that could fail. The failure of low-beam can significantly increase the risks of a crash.

General Motors

General Motors is recalling select Chevrolet, Chevy and GMC models that have an inherent risk of fracture in their gear shafts. The problem was discovered by the supplier during testing of steering gear units.


Although tests indicate that failure will not occur at least five months after the most severe use, a fracture could lead to loss of steering and increased risk of accident. This consideration has made it imperative for General Motors to recall vehicles before any major accident is reported.

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Porsche will recall its 2012 model-year 911 Carrera S coupes. The company has said that the issue results in the possibility of an interference between a coolant line and fuel line which may cause the latter to become disconnected. This could result in stalling or fire in the case of a fuel leak. Porsche will replace the fuel line in all the recalled vehicles.

Recalls are traditionally expensive for the companies as they have to spend millions of dollars on repair and then spend much more on marketing to convince the customers that their vehicles are still safe and reliable. Considering that now most of the big automotive houses are recalling cars, it will be interesting to see what impression this leaves in the minds of the customers.

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