Honda share price down, CEO Takanobu Ito to step down

Honda Motor Co announced on Monday it had appointed one of its experienced engineers as a future replacement for Chief Executive Takanobu Ito.

Takahiro Hachigo, who has been with the company for more than 30 years and has vast international experience, will takeover in late June, the worlds third-biggest car maker said in a statement.

The 55-year old veteran, currently a managing officer based in China, joined Honda in 1978 as an engineer and has worked his way up the corporate ladder going through positions in research and development, purchasing and car design.

Under Mr. Hachigos supervision Honda developed the first Odyssey model, assembled in 1999 on US soil, and the second-generation CR-V in 2001.

Mr. Ito, 61, will step down from the top position six years after he took the job and had to deal with the outcome of the global financial crisis. Mr. Ito, who joined Honda in 1978, guided the company through few natural disasters and at the same time managed to expand the car makers operations.

Under Mr. Itos leadership Honda returned to its position as an engine supplier for Formula One vehicles and it will participate in this years racing season. Additionally, the company aims to release to the broader market its first fuel-cell vehicle by 2016.

However, Mr. Ito passes the torch after a wave of recalls and lower annual profit expectations.

Although Takatas faulty airbags, which have proven to be unstable and could deliver serious or even lethal damage to passengers, triggered recalls at nine other car manufacturers, Honda was the most injured one, including taking a record $70 million fine imposed by US regulators. Since 2008 Honda has called back more than 14 million vehicles globally in relation to Takatas airbags.

Additionally, Honda initiated five recalls over the past year all related to its newest Fit model. The initiatives curbed sales and prolonged new projects by as much as six months.

Honda is also under a lot of pressure from rivals as smaller Nissan is quickly gaining ground on Honda in the US, while market leader Toyota is posting record profits.

Honda lost 0.91% on Monday and closed at ¥3 928.5 in Tokyo, marking a one-year increase of 6.20%. The company is valued at ¥7.18 trillion.

According to the Financial Times, the 23 analysts offering 12-month price targets for Honda have a median target of ¥4 200, with a high estimate of ¥4 800 and a low estimate of ¥3 100. The median estimate represents a 6.9% increase from the last closing price.