NEW YORK (TheStreet) -- Honda Motor Co. Ltd. (HMC) , along with its joint ventures in China, is recalling 569,769 cars due to potentially defective airbags made by Japan's Takata Corp. (TKTDY) , Reuters reports.
Globally there have been almost 20 million vehicles recalled by carmakers since 2008 as a result of an issue with the airbag inflators.
There have been five deaths linked to the issue, Reuters added.
Shares of Honda Motor are up by 0.28% to $29.01 in late morning trading on Tuesday.
GAC-Honda, the joint venture between Honda and Guangzhou Automobile Group Co. announced a recall of 527,136 Accord models manufactured between May 2002 and December 2007, Reuters said.
GAC-Honda is also recalling 16,505 Fit Saloon cars built between October 2002 and December 2003.
Dongfeng-Honda, the company's joint venture with Dongfeng Motor Group Co. will be recalling 26,128 Elysion MPVs manufactured between June 2012 and June 2014, due to defective airbags on the driver's side, Reuters noted.
The recall will begin on February 28, 2015.
The recalls are due to potentially damaged airbags which could cause "shell fragments to fly...this may hurt passengers in the car and there are risks to safety," China's General Administration of Quality Supervision, Inspection and Quarantine said, Reuters reports.
Separately, TheStreet Ratings team rates HONDA MOTOR CO LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HONDA MOTOR CO LTD (HMC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 1.00, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.77 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, HONDA MOTOR CO LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 17.4%. Since the same quarter one year prior, revenues fell by 14.9%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- HONDA MOTOR CO LTD' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HONDA MOTOR CO LTD increased its bottom line by earning $3.10 versus $2.17 in the prior year. For the next year, the market is expecting a contraction of 4.8% in earnings ($2.95 versus $3.10).
- You can view the full analysis from the report here: HMC Ratings Report