General Motors Recalls Sonic Cars - Analyst Blog


General Motors Company ( GM ) discovered a problem in the strap welds of its Chevrolet Sonic cars, which could lead to fire in extreme cases. As a result, the company is recalling 1,658 cars of model years 2013 and 2014. 100 of the recalled cars are in Canada, while the rest are in the U.S.

General Motors noticed the problem at its assembly plant in Orion, MI. Although the company is not aware of any casualties, it is recalling the cars to examine and if necessary, repair the bracket straps.

According to General Motors, the severance of the strap bracket can cause the fuel tank to rest on the exhaust pipe or plastic fuel tank shield. While this will only lead to some noise, the fuel tank might separate from the vehicle if the shield and fuel filler neck yield to the weight. Moreover, if the fuel tank is pierced, it can cause a serious combustion.

The news led to a 1.5% decline in the share price of General Motors to $35.18 on Monday. The company announced at least 3 other recalls for around 0.41 million vehicles in the last quarter.

In September, General Motors announced the recall of the diesel version of Chevrolet Sail. The automaker is recalling 4,000 vehicles in India to fix a faulty engine part. In August, the company recalled its 2011 and 2013 Chevrolet Cruze cars in the U.S. to fix a problem in the power-assisted brakes.

In Jul 2013, General Motors had recalled 114,000 Chevrolet Tavera sport-utility vehicles (manufactured from 2005 to 2013) in India to repair problems related to emission standards and other government specifications.

Other players in the automobile industry like Toyota Motor Corp. ( TM ), Ford Motor Co. ( F ) and Honda Motor Co., Ltd. ( HMC ) are also witnessing a series of recalls.

General Motors currently carries a Zacks Rank #2 (Buy).

FORD MOTOR CO (F): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

HONDA MOTOR (HMC): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

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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 , GM , HMC , TM

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