Ford Motor Co.
) has recalled its Figo and Classic cars in India in order to
investigate problems with their rear twist beams and power steering
hoses. The company did not disclose the number of recalled cars,
which were manufactured between January 2008 and December 2010.
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Ford suspected a potential crack in the rear twist beam in the
vehicles, which could lead to the car being inoperable. It will
also inspect the problem with the power steering hoses in the
vehicles, which could result in oil leakage and even fire in
extreme cases. The automaker has not yet received any reports of
injuries or accidents due to the defects.
Automotive safety recalls were brought into focus by media after
) 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. The
Transportation Department of U.S. also imposed a fine of $48.4
million on the company due to late recall of millions of defective
Last month, Ford had recalled 8,266 units of its recently launched
Escape compact sport-utility vehicles (SUVs) in the U.S. in order
to fix their improperly installed carpet padding. The 2013 model
year vehicles were manufactured between March 8 and June 7 this
year at the company's retooled Louisville Assembly plant.
Ford, a Zacks #4 Rank (Sell) stock, posted a 39% fall in profits of
$1.20 billion or 30 cents per share in the second quarter of the
year from $1.98 billion or 49 cents in the corresponding quarter of
2011 due to lower operating results in all the regions except North
America. However, the company's profits were higher than the Zacks
Consensus Estimate of 28 cents per share.
Revenues in the quarter dipped 6% to $33.3 billion, due to the same
factors mentioned above. However, it exceeded the Zacks Consensus
Estimate of $32.0 billion. In the first half of the year, Ford's
U.S. total market share was 15.4% in the U.S. and 8.1% in Europe.
Ford anticipates market share in the U.S. and Europe to be lower
than 16.5% and 8.3%, respectively in 2011. It also expects the
overall pre-tax operating profit to be lower than 2011 compared
with the prior guidance of tallying. Operating margin in the
Automotive segment is anticipated to be equal or lower rather then
the prior guidance of improve over 5.4% in 2011.