Ford Recalls C-Max Plug-In Hybrids - Analyst Blog

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Ford Motor Co. ( F ) announced that it would recall 33,021 units of C-Max hybrid multi-purpose vehicles (MPV) in the U.S. due to a roof component that do not meet safety requirements. The issue has been noticed by both the National Highway Traffic Safety Administration and the automaker.

The recalled C-Max hybrid cars were manufactured between Jan 19, 2012 and Jun 26, 2013 in Michigan. Their roof components do not provide enough protection against head injuries. Only vehicles without the optional panoramic glass roof will be recalled by the company.

Ford Motor is planning to install plastic energy-absorbing material under the roof on both sides of the vehicle to correct the problem. The automaker has not yet received any reports of accidents or injuries related to the problem.

Earlier this month, Ford Motor also announced recall of 972 units of diesel variant of EcoSport mini sports utility vehicles (SUVs) in India due to a glitch with their the glow plug module, which helps in starting engines.

Ford started shipping locally manufactured EcoSport in India in June this year with a starting price of 559,000 rupees ($9,400) in order to tap the growing market for mini-SUV in the country.

Automotive safety recalls were brought into focus by media after Toyota Motors ' ( TM ) announcement of the largest-ever global recall of 3.8 million vehicles in September 2009, triggered by a high-speed crash that killed 4 members of a family. Later on, a string of recalls has led Toyota to face numerous personal injury and wrongful death lawsuits in federal courts.

A few months ago, the Transportation Department of U.S. slapped a fine of $17.35 million on Toyota Motor due to late response regarding a defect in its vehicles to safety regulators as well as late recall of those vehicles.

According to the department, it was the maximum allowable fine under the law for not initiating a recall in a timely manner. The fine added to $48.4 million imposed by the U.S. government on the company in 2010 due to late recall of millions of defective vehicles.

In April, Toyota along with other Japanese automakers, Honda Motor Co. ( HMC ), Nissan Motor Co. ( NSANY ) and Mazda Motor Corp. recalled 3.4 million vehicles globally for an identical problem. All these automakers have recalled vehicles for fixing defective airbag system in their vehicles, supplied by Japanese auto parts maker Takata Corp.

Ford, a Zacks Rank #2 (Buy) stock, posted an impressive 50% rise in earnings per share to 45 cents in the second quarter of 2013 from 30 cents in the same quarter of 2012 (all excluding special items). With this, the company has beaten the Zacks Consensus Estimate of 37 cents.

Revenues in the quarter grew 14.4% to $38.1 billion, exceeding the Zacks Consensus Estimate of $35.4 billion. The improvement was attributable to increased wholesale volumes in automotive business and higher market share in all its regions.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: F , HMC , MPV , NSANY , TM

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