Honda's (HMC) Global Operations Disrupted by Cyber-Attack

Honda Motor Co., Ltd. HMC was hit by a cyber-attack on Monday that disrupted its business in several countries. However, the company expects to contain the overall impact at the earliest. The virus affecting Honda is reportedly part of the SNAKE ransomware family, which targets an entire network instead of individual workstations.

Honda was forced to send some employees home for the day, as e-mails and other systems in plants around the world were affected by the attack. Nevertheless, the firm stated there was no data breach due to the cyber-attack. It is working to restore full functionality of production, sales and development activities in order to reduce the impact of the attack.

Honda was forced to halt global production for a day since the cyber-attack breached the company's internal servers in Japan and through several U.S. factories. While most of the work has been resumed, car plants in Ohio and Turkey, and motorcycle factories in Brazil and India remain closed.

In addition, production at Honda’s U.K. plant had been halted due to the coronavirus outbreak and the latest attack is unlikely to change its plans to restart activities this week. Honda, which manufactures its iconic Civic model at the site, will permanently close the U.K. plant next year, with loss of about 3,500 jobs in the middle of a restructuring that aims to adjust its operations to reflect greater demand in Asia and North America. The attack might also have affected a vehicle-inspection system. Nonetheless, no information about customers or employees appears to have been exposed at this point due to the cyber-attack.

In 2017, Honda was hit by a similar cyber-attack, when the WannaCry ransomware forced the company to stop production. In the years since, Honda is said to have strengthened its cyber-security defences. Although the cyber-attack appears to have targeted the company’s internal servers, there is a growing concern that the automotive industry needs improved safety now that so many cars are connected on the network.

Zacks Rank & Stocks to Consider

Honda currently carries a Zacks Rank #5 (Strong Sell). Shares of Honda have depreciated 1.8%, year to date, compared with the industry’s decline of 7.7%.

 

Some better-ranked stocks in the same sector are Tesla, Inc. TSLA, Halfords Group Plc HLFDY and Niu Technologies NIU. While Tesla sports a Zacks Rank of 1 (Strong Buy), Halfords and Niu carry a Zack Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Tesla have surged 124.9%, year to date, as against the industry’s rise of 41.2%.

Shares of Halfords have rallied 14.3%, year to date, as against its industry’s decline of 6.3%.

Shares of Niu have gained 38.2%, year to date, as against the industry’s decline of 6.4%.

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