Major Developments Major Developments by Calendar Year

Honda expanded its global recall of cars because of a problem in the airbags to another 437,000 vehicles globally. This adds to the vows of the auto industry that is already suffering from the massive recall announced by the top global car manufacturer Toyota that ran into more than 8 millions. Honda has been increasing the number of recalls since it first announced the fault in the airbags 15 months back. The issue is old but it is gained more focus in the midst of the biggest recall of Toyota.

This massive recall also included some models that date back to 2001 and 2002. However, there is no question about the impact on the future sales and reputation of the Japanese auto major in the international markets. They will be some erosion in the brand value in the developed markets where there are more substitutes for the segments. But in the long run this will increase the trust on the company.

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Toyota’s reputation in the U.S. as a builder of dependable, high-quality cars stumbles due to the concerns over the safety of the passengers. Last year it recalled 4.2 million vehicles over concerns that accelerator pedals could get struck under floor mats, causing sudden acceleration and sometimes leading to accidents. It was the sixth-largest recall ever in the United States. This problem was blamed for several accidents, including an accident involving a Lexus that accelerated to more than 120 mph before crashing.

Toyota recently said that it is recalling more 2.3 million vehicles in the U.S. to fix accelerator pedals. The recall includes the vehicles 2009-2010 RAV4, the 2009-2010 Corolla, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2007-2010 Camry, the 2010 Highlander, the 2008-2010 Sequoia and the 2007-2010 Tundra.

Toyota said that in some rare cases, the mechanism of gas pedal wears down, making the accelerator to become harder to press, slower to return or in some worst cases, it gets stuck.

Toyota recommends that drivers of the recalled vehicles should apply their brakes firmly if the gas pedal gets stuck and immediately approach the local dealer.

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A child was killed when fire broke out in a Honda car last year due to a faulty switch. The Honda Motor Co. then recalled 646,000 units of its Fit/Jazz and City automobiles globally over a fault in the window switch.

Except Japan, it recalled 140,000 cars in the United States and covers these models in North America, South America, Europe, South Africa and Asia. In Japan, Fit is Honda’s best-selling model.

Earlier Toyota Motor Corp’s announced it would extend its recall of millions of cars to Europe and China due to faulty floor mats and accelerator pedals.

According to Honda, the recall was to fix a defective master switch, which could cause water to enter the power window switch and may cause fire. There were three cases of fire, two in the United States and one in South Africa, due to this defect.

A Honda’s spokesman said that the company had recalled all 2002 to 2008 year model Jazz units in South Africa. It is also said to recall 172,000 vehicles in Britain. And at the recall a waterproof switch will be fitted to the window to avoid any damage that can cause fire.

Suggested Reading:
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China the World’s Largest Auto Market
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Bankruptcy of Lehman Brothers is recorded as the largest one
Nobel Prize in Economics 2008

China became the world’s largest auto market last year displacing the U.S in car sales. With a 46 percent increase in vehicle sales to 13.6 million units, China was the top auto market last year. It was helped by government measures including a consumer tax cut on small cars. Except the last January, where car sales dropped, as the tax cut didn’t take effect till then, there was a huge rise in car sales in 2009.

General Motors said January sales in China rose 97 percent compared to the same month last year to 219,192 units. Ford Motor Co. reported that its passenger vehicle sales in China last month surged more than 100 percent from a year earlier. Toyota said its sales in China rose 53 percent to 72,000 units this January.

General Motors and Toyota Motors maintained strong sales in China in January this year. However, the country’s car market this year is likely to fall as many companies such as Toyota and Honda are recalling due to some technical faults.

Toyota as part of a global recall of some of its vehicles due to faulty gas pedals, is recalling 75,552 units of RAV4 sport-utility vehicles in China. We can’t say how much it will affect Toyota’s sales in the country as of now. On the other side General Motors expects to sell more than two million units in China this year.

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