Honda Motors Co Ltd- ADR (NYSE:HMC) Will Retrofit the First 12,000 Units of Its 2015 Fit Compact Vehicle

1225

By dmcIntire on August 22, 2014 Consumer Staples

Honda Motors Co Ltd- ADR (NYSE:HMC), on the last business day, August 21, 2014, announced that it will retrofit the first 12,000 2015 Honda fit vehicles that the company introduced in the market, to get better marks from the Insurance Institute for highway Safety. The company called all its customers who purchased the 2015 Honda fit cars to get back to the company so that the cars could be updated.

The chief engineer of the car safety at Honda Motors Co Ltd- ADR (NYSE:HMC), Chuck Thomas, said that the company introduced some changes in its front bumpers on June 9, so as to make the car more efficient. The engineer said that the first 12,000 cars have no safety issues as such; it is just that the company wants to alter the bumpers of those cars as well so that the customers can enjoy better experience.

The company said that it will contact the owners of its first 12,000 cars in September. The company will ask those owners to bring the cars to the dealers so that the cars can be retrofitted. It is important to note here that Honda Fit has not seen much growth in the United States market. In fact, the sales of these cars dropped by 12 percent over a period of one year.

According to a report submitted by IIHS, the 2013 Honda Fit showed the worst performance out of the 11 participating vehicles, when the car undertook a simulation test. The test was designed to see what happens when the front of the car hits another object, such as a tree, another car or a pole. The report further stated that only Chevrolet Spark of General Motors was able to score well in that test.

In order to get the ‘Top Safety Pick’ score from the IIHS, the vehicle must get at least the score of ‘acceptable’ in the small front test, together with a score of ‘good’ in all the other 4 tests. The ratings that can be given in these tests include poor, marginal, acceptable and good.

Honda Motors Co Ltd- ADR (NYSE:HMC) asked the IIHS for another chance when it released its 2015 Fit model in the market, The company predicted in January that its new model would get a ‘good’ rating in the small overlap test. However, the ratings of the cars improved from ‘poor’ to ‘marginal’ in March 2014 when the new model undertook the test. The 2015 Honda Fit model failed to get the IIHS’s top safety award.

Honda Motors Co Ltd- ADR (NYSE:HMC), altered some of the features of 2015 Fit and asked IIHS for yet another chance; this time, the company got ratings of ‘acceptable’, qualifying for the top safety award. It is important to note here that Honda introduced a steel beam behind its front bumper in order to make the frontier of the car stronger.

Coming to the stocks of the company, Honda Motors Co Ltd- ADR (NYSE:HMC), on the last business day, started its stocks at a price of $34.40 and closed at an increased price of $34.73, after hitting the highest figures of $34.80.