Honda recalls 2.5 million vehicles

Honda Motor Co Ltd will recall 2.49 million cars, small SUVs and minivans worldwide, including its popular Accord sedan, to repair a software problem that could damage the automatic transmission.The recall includes 1.5 million vehicles in the United States, about 760,000 in China and 135,142 in Canada.This week, Consumer Reports said it was not recommending the 2012 Honda Civic. This led some industry analysts to ask if that was a symptom of larger problems at the automaker.The company has said it disagreed with the influential U.S. consumer advocate's assessment.Chris Martin, Honda spokesman at the company's U.S. headquarters in California, said the recall was not a sign of deeper difficulties, but instead stemmed from "extremely unusual circumstances.""The far majority of our consumers would never really encounter this," he said. "It's software programing. It's not a weakness in the transmission per se."

Through July, Honda auto sales were down 2.6 percent in the U.S. market, in large part because of the supply crisis caused by the March earthquake and tsunami in Japan. Overall, U.S. auto industry sales were up 11 percent for the period.The U.S. market is Honda's most important, accounting for a third of global sales and even more of earnings.Honda was sixth in the U.S. auto market through July, down from fourth for all of 2010.The company reported a profit of 22.58 billion yen ($292.5 million) for the June quarter, but is adding inventory and expecting a sales boost in the second half of 2011, just as the U.S. and global economy faces greater uncertainty.Honda's U.S.-traded shares were up 1 percent at $36.65 in afternoon trading on the New York Stock Exchange, while the S&P 500 index rose 0.9 percent.