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Suspension of CR-V sales hits Honda in China

Social media claims of gasoline smells in the cabin triggered recall

The CR-V sport utility vehicle, once the top-selling Honda model in China, has not been seen in showrooms since early March. (Photo by Yu Nakamura)

GUANGZHOU -- An unexpected complication in a recall of the popular CR-V sport utility vehicle has dented Honda Motor's Chinese sales significantly.

The Japanese automaker has been thriving in China in recent years. Honda's sales here jumped 33% on the year in 2015, 24% in 2016 and 16% in 2017. It became the country's fourth-ranked automaker in sales last year, surpassing Toyota Motor. The popularity of SUVs fueled the momentum.

But the tide changed around the turn of the year, when owners started complaining about gasoline smells in the cabin of the CR-V, pointing out design flaws on social media network Sina Weibo, the Chinese equivalent of Twitter.

On Jan. 11, Chinese authorities questioned Honda about the issue. Honda on Feb. 28 filed to recall the CR-V. But for reasons that are unclear, the recall plan was rejected by the authorities.

Honda cannot sell the model without approval of the recall plan, so it suspended sales on March 2. The vehicle remains off the market today, a month and a half later, and Honda's overall sales in China fell 13% in March.

The CR-V was the top seller among the 20 models Honda sold in 2017, so the suspension in China hurts company sales significantly.

Honda has indicated that testing in the cold environment of minus 20 C to minus 30 C was inadequate for the model. When the vehicle is driven repeatedly for short periods like five minutes in such an environment, fuel smells could seep into the cabin, the company concedes.

Heightened caution over similar problems reported with other automakers may explain the rejection of Honda's recall proposal. Domestic producer Changan Automobile, for instance, quickly compiled a recall plan and received a green light from the authorities, but the measures proved inadequate and problems persisted.

Honda is re-examining the designs of CR-V components to devise an effective remedy for the gas odors, but such procedures usually take at least a month or two. Until the problem is under control, Honda's Chinese sales are likely to keep dropping.

"It hurts not being able to sell the CR-V, which was so popular that people had to wait four months to get it," a Honda dealership employee in Guangzhou lamented. There is no timeline for resuming sales at the moment, an executive said.

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