Nissan Motor Co.
(
NSANY
) revealed that it would recall 51,000 units of Qashqai sports
utility vehicles (SUVs) and NV200 vans in Europe, Asia, Latin
America, the Middle East and Australasia in order to address a
problem with their steering wheels.
The Japanese automaker prompted to recall the vehicles voluntarily
after receiving complaint from a new Qashqai owner in Finland,
where the steering of the vehicle became detached while driving.
The company stated that the steering wheel of the vehicles could
loose only "in extreme circumstances". Fixing the defect would mean
replacing parts in some 600 recalled vehicles, which include
Qashqai, Qashqai+2 and Nissan NV200 models.
Last year, Nissan recalled many of its models that include
Infiniti, Frontier, Xterra, Pathfinder, Sentra and Juke. Among
them, the largest recall included 34,000 units of Sentra compact
cars due to a problem with their battery cables that caused the
engines to stall.
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 had led Toyota to face numerous
personal injury and wrongful death lawsuits in federal courts. The
Transportation Department of U.S. had also imposed a fine of $48.4
million on the company due to late recall of millions of defective
vehicles.
Nissan, a Zacks #3 Rank (Hold) stock, witnessed a 15% fall in
profits to ¥72.3 billion ($903.5 million) or ¥17.24 (21 cents) per
share in the first quarter of fiscal 2012 ended June 30, 2012, from
¥85.0 billion or ¥20.32 in the corresponding quarter last year.
Reported profit also missed the Zacks Consensus Estimate of 51
cents per share.
Revenues in the quarter grew 2.6% to ¥2.14 trillion ($26.64
billion). Unit sales increased 14.6% to 1.21 million vehicles
globally. Net sales grew 12.4% to ¥1.1 trillion ($13.80 billion) in
Japan, 7.2% to ¥754.9 billion ($9.4 billion) in North America and
6.1% to ¥518.8 billion ($6.5 billion) in Asia. However, revenues in
Europe declined 12.8% to ¥371.5 billion ($4.6 billion) during the
quarter.
Operating profit in the quarter fell 20% to ¥120.7 billion ($1.5
billion) from ¥150.4 billion in the year-ago quarter. The decrease
in operating income was due to unfavorable foreign currency
translation, high selling costs in North America due to product
renewal cycle and unfavorable pricing.
Nissan expects to launch new products and renew major lineups
across its namesake, Infiniti and Venucia brands. The company
expects total sales to increase 9.5% to ¥10.3 trillion ($128.8
billion) in fiscal 2012.
Operating income is projected to surge 28.2% to ¥700 billion ($8.75
billion) in fiscal 2012. Profits expect to go up 17.2% to ¥400
billion ($5 billion) or ¥95.44 ($1.19) per share for the year.
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