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.
Generally, larger recalls that catch the eye of the public tend to inflict more brand damage on the company than smaller recalls. Toyota's recall of 3.8 million vehicles in 2009 over the issue of jamming floor mats is a typical example of this. Therefore, on a relative basis Honda's recall is probably going to be more negative for the company given its larger scale than GM and Porsche's recalls. We have a price estimate of $44 for Honda, which is around 15% above the current market price. Click here to find out how a company's products impact its stock price at Trefis. Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.