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Honda backing away from 6 million a year car sales goal: CEO

A Honda dealership sign is shown at a car lot in Carlsbad, California November 5, 2014. REUTERS/Mike Blake

By Maki Shiraki

ASAHIKAWA, Japan (Reuters) - Honda Motor Co <7267.T> is backing away from its goal of selling 6 million cars a year by March 2017, its chief executive said, conceding that recent quality woes may have had something to do with pressure to meet the lofty target.

"There is definitely a sense that there was a tremendous burden on the development team," CEO Takanobu Ito told journalists on Friday in northern Japan.

"In a way, we have shelved the 6 million-car sales target," he said, adding that the company was in the middle of drawing up a new business plan.

Ito and 12 other executives agreed in October to take pay cuts for three months after Honda announced a fifth recall on the Fit hybrid subcompact in less than a year since its launch.

Honda's quality problems have been compounded by multi-million-vehicle recalls to replace potentially faulty air bags made by top supplier Takata Corp (7312.T) in the past few years.

Takata’s air bag inflators, which can explode with too much force and spray shrapnel inside cars, have forced a dozen automakers to recall about 25 million vehicles worldwide since 2008.

Honda, which has a small stake in Takata, accounts for more than half those vehicles, and last month issued a profit warning as it set aside more cash for the recalls.

Even as Takata’s losses mount, Ito said he was not interested in offering financial assistance, though he suggested Honda could provide other kinds of help.

“What we want to avoid is delaying delivery of parts to our customers, so we’ll provide the necessary support for that,” he said.

Honda has already sought help from Takata rivals Daicel Corp <4202.T> and Autoliv (ALV.N) to provide replacement inflators, and Ito said he expected its orders to them would be “quite large” since Takata was struggling with capacity.

(Writing by Chang-Ran Kim; Editing by Pravin Char and Andrew Heavens)