Honda Motor Co Ltd has agreed to pay a record $70 million in fines after failing to report hundreds of incidents resulting in injuries and deaths involving its vehicles to the US government.
The American unit of Honda will pay two separate civil penalties of $35 million each, the maximum allowable under US law. The first fine is related to Hondas failure to report 1 729 accident claims between July 2003 to June 2014 to the National Highway Transportation Safety Administration, while the other one involves missing reports related to warranty claims.
The total amount of the penalties mark the biggest fine imposed on a car manufacturer in history and follows the aggressive approach taken by the NHTSA last year. In 2014 more than 62 million alerts about faulty vehicles have been received by the US agency, which resulted in around $126 million in civil penalties during the year.
“Honda and all of the automakers have a safety responsibility they must live up to – no excuses,” US Transportation Secretary Anthony Foxx said in a statement today. “These fines reflect the tough stance we will take against those who violate the law.”
Car companies are obligated under federal law to issue “early warning” reports and hand them over to the US government. Watchdogs use the information provided to identify any potential safety defects or trends and decide whether to take action.
Honda has previously said that its lack of reporting was due to data entry and computer programming errors and at the same time the “overly narrow interpretation” it used of US law requirements.
“We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting,” Rick Schostek, executive vice president of Honda North America Inc, said in a statement.
The company said it was launching new training regimens, changing internal reporting policy and enhancing overnight of its early warning reporting process. Honda has also agreed to let the NHTSA and third-party audits to monitor its safety reporting.
Honda Motor Co Ltd gained 1.93% on Thursday and an additional 1.15% on Friday to close at JPY 3 531.5, marking a one-year decrease of 17.10%. The company is valued at JPY 6.32 trillion.
According to the Financial Times, the 22 analysts offering 12-month price targets for Honda Motor Co Ltd have a median target of JPY 4 030, with a high estimate of JPY 4 700 and a low estimate of JPY 3 100. The median estimate represents a 14.12% increase from the last price.
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