Japan has two large car companies known throughout the world for quality, workmanship, value, and fuel efficiency. Each took several decades to establish its brand in the US. Each burnished its brand by the launch of hybrids which brought in a new generation of eco-conscious car buyers.

Toyota (TM), the larger of the pair, has ruined it reputation, perhaps forever. It has recalled nearly eight million of several of its most popular models from around the world. Almost immediately after, it recalled over 400,000 versions of its 2010 Prius hybrid for brakes problems.

Honda (HMC), the smaller firm, today recalled 378,758 vehicles in the US for possible airbag problems. The models include certain 2001 and 2002 Accord, Civic, Odyssey, CR-V, and selected 2002 Acura TLs. Honda recalled  440,000 cars in July for airbag related issues. Honda said it was aware of 12 individual incidents due to the flaws.

In a statement given to the AP, Honda said “we have concluded that we cannot be completely certain that the driver’s air bag inflator in the vehicles being added to this recall at this time will perform as designed.”

The news is likely to damage Honda’s sales in the US and probably elsewhere. Toyota’s American sales fell 16% in January even though its recall problems were not disclosed until after mid-month. Industry experts expect that Toyota’s sales will be down by a larger margin in February. The world’s No.1 car company has put aside $2 billion to cover the costs of the recalls and projected lost sales.

It was only yesterday that Honda’s CFO said, “If customers start to harbor doubts about [quality and safety], that would be problem for the whole industry.” It was only a matter of 24 hours for Honda to become a part of the growing problem.

As the number of recalls mounts, car buyers will naturally be concerned about the safety standards of the entire industry. Many drivers will be tempted to keep the vehicles that they have, however old. An old, safe car is better than a dangerous new one.

Douglas A. McIntyre

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.