Honda Motors' CEO to step down

The chief executive of Honda Motor Co would step aside later this year Japan's third-largest carmaker after suffered a severe blow to its reputation due to quality issues, Bloomberg reported.

In a move that came as a surprise yesterday, 61-year-old Takanobu Ito said he would hand over the reins to managing officer Takahiro Hachigo, 55, after the annual shareholders' meeting in late June.

Ito, the motorcycle-racing engineer who had been at the helm since 2009, said he handpicked Hachigo in view of his experience running Honda's various overseas businesses.

The CEO is bowing out after seeing the company through a difficult phase that began with a global recession, followed by natural disasters and unfavorable exchange rates and recalls over faulty airbags. Ito's successor will have to take Honda past the latest crises, record recalls involving deadly Takata Corp air bags and flaws with the popular Fit compact car, had hurt the company's reputation for quality.

The promotion sees Hachigo, 55, overtake higher-ranking executives such as Koichi Fukuo, who was promoted last year to oversee product quality.

Hachigo would be the first Honda CEO not to lead Honda R&D Co, the carmaker's research arm. Fukuo would be the next president of Honda R&D.

Meanwhile, AP reports that the unexpected decision comes after over 6.2 million Honda vehicles in the US – and millions of others elsewhere equipped with air bags made by Japan's Takata Corp had to be recalled.

The air bags come with inflators that explode, expelling shards of metal and plastic.

The problem had led to at least six deaths and 64 injuries worldwide.

At a press conference yesterday, Ito said it was his own decision to step down. Ito joined Honda in 1978, as a chassis engineer and had been with the company since then.

''I believe Honda needs to become one strong team in order to overcome challenges and the team requires a new, youthful leadership,'' Ito said, according to a transcript provided by Honda.

Takata air bags are used by other auto makers, but Honda had the most exposure and was spending heavily on the recalls. The company has cut its full-year profit forecast to $4.6-billion from $4.8-billion.