General Motors Company
) joint venture with Shanghai Automotive Industry Corporation
(SAIC), Shanghai GM, will recall 47,415 units of Chevrolet Aveo
cars in order to fix their faulty brake fluid sensors. The cars
belong to the model year 2012.
The General Administration of Quality Supervision, Inspection
and Quarantine revealed that it is a supplier's fault. The defect
could fail to alert drivers about low brake fluid levels. The
company will fix the sensors free of charge.
This is the third vehicle safety recall of GM in China since
December last year. Late December, Shanghai GM had recalled 9,862
units of 2011 Cadillac SRX model due to defective transmission
Then, earlier in March, GM recalled 16,618 units of Chevrolet
Captiva and Opel Antara crossover sports utility vehicles in China
due to a problem with the antilock braking system in the vehicles.
The recall involved vehicles that were manufactured between April
11, 2006, and November 9, 2009.
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
Auto sales in China grew 5% to 1.62 million vehicles in April
after recording a slack first quarter. However, sales in the first
four months of the year slid 1.3% to 6.4 million vehicles owing to
tighter credit policies and slower economic growth.
GM's total sales in China grew 11.7% to 227,217 vehicles during
the month. Shanghai GM sales went down 2.2% to 94,101 units while
SAIC-GM-Wuling sales went up 27 % to 127,362 units.
GM, a Zacks #3 Rank (Hold) company, reported a $100 million fall
in profits to $1.6 billion in the first quarter of 2012 from $1.7
billion in the same quarter of 2011, before special items, due to
lower profits from its European operations.
On per share basis, adjusted profits were 93 cents during the
quarter, down 2 cents from the first quarter of 2011. However, it
exceeded the Zacks Consensus Estimate of 84 cents. Adjusted
earnings before interest and taxes (EBIT) dipped to $2.2 billion in
the quarter from $2.0 billion in the year-ago quarter.
Revenues in the quarter went up 4% to $37.8 billion on a 3% rise
in unit sales to 2.3 million vehicles globally. It was higher than
the Zacks Consensus Estimate of $36.4 billion. The automaker
occupied a worldwide market share of 11.3% during the quarter,
compared with 11.4% a year ago.
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