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Monday, August 16, 2010

Honda recalls 428,000 cars in North America




Honda Motor is recalling more than 400,000 cars in North America. It's due to a defect that could cause the cars to roll away if parked incorrectly.

The recall in the U.S. would include the Accord, Civic and Element models from 2003 and 2004, and the same models in Canada along with the Acura.

Japan's No.2 said in some situations a part known as the ignition interlock could fail. A device intended to keep keys from being removed if the vehicle is not in park.

Separately, Honda will cut production at one of its main Japanese plants from October.

The automaker also expects domestic demand to trail off with government subsidies for eco-friendly cars set to end Sept. 30.

The end of subsidies is seen potentially triggering a price war with rival hybrid maker Toyota. Honda is launching the market's cheapest hybrid in October for about $18,600.

Shares of Honda, which made a $2.7 billion operating profit last quarter, were slightly higher by midday Tuesday, as the yen eased mildly against the dollar.
 
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