Will Honda (HMC) Stock be Affected by Massive Air Bag Recall?

NEW YORK (TheStreet) -- Honda Motor (HMC) said on Thursday that it is planning to recall 5 million cars in order to replace potentially fatal air bags made by Japan's Takata Corp. and the recall could impact the automotive maker's sales in Japan, Reuters reports.

"There may be some impact [on Japan sales] but we want to make sure we take the right steps," senior Managing Officer Sho Minekawa told reporters at the launch of the company's new shuttle hybrid model.

The issue with the Takata airbags is that some inflators were not properly sealed, which could allow moisture to enter the propelling casing, causing the airbag to explode with excessive force, Reuters said.

Honda's recall is covering 14 models produced between 2002 and 2008. Earlier this week Toyota Motor (TM) and Nissan Motor (NSANY) issued recalls of close to 6.5 million vehicles relating to the same airbag problem.

Honda is also recalling 11,381 vehicles in India in order to replace the airbags, Reuters said.

Shares of Honda Motor closed at $35.08 on Thursday afternoon.

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 some important positives, 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 good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

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