Shares in automobile manufacturer Honda (HMC) spluttered lower today after a probe was launched into whether engines in millions of its vehicles are safe.
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Bearing Failures
The National Highway Traffic Safety Administration (NHTSA) said it was opening an investigation into more than 1.4 million Honda vehicles sold in the United States over concerns that connecting rod bearing failures in their engines could lead to complete engine failure.
This could, theoretically, increase the risk of a crash.
In a letter dated August 20, the regulator said it had received 414 reports of the issue in various Honda and Acura vehicles’ 3.5-liter V6 engine.
It powers models like the Acura TLX, Acura MDX, Honda Pilot, Odyssey, and Ridgeline built from 2016 to 2020.
Back in January this year, Honda recalled 294,612 vehicles with potential errors in their fuel injection electronic control unit (FI-ECU). The problem present in these vehicles can result in a stalled engine or a loss of power.
The models impacted included Acura MDX Type-S vehicles with years ranging from 2022 to 2025, Honda Pilot vehicles from 2023 to 2025, and Acura TLX Type-S vehicles from 2021 to 2025.
At a difficult time for the auto industry given tariff uncertainty and faltering consumer confidence, this spate of recalls is an unwelcome hit to brand reputation.
This is why legal and regulatory issues are such a key risk for auto companies and their investors – see above.
Safety Focus
It appears that the NHTSA is ramping up its efforts to improve safety and transparency in the auto sector. It is also keen to respond faster to customer complaints.
Honda’s auto-making rival Stellantis (STLA) has also been hit by a number of recalls this year. Back in July, the NHTSA opened a recall query into about 299,000 vehicles from Stellantis, whose brands include Chrysler, Dodge and Fiat, after receiving complaints about faulty shifter cable bushings.
Other recalls for Stellantis this year include 235,640 Ram ProMaster vans with faulty rearview camera systems, 33,777 Ram 1500 trucks with headlight failure issues and 10,396 Ram 1500 pickup trucks with tire pressure monitor errors.
Is HMC a Good Stock to Buy Now?
As only a few analysts cover the HMC stock, let’s look at how it has performed over the last three months. As one can see, the HMC stock has risen by 16%.
