Polaris Recalls Ranger Off-Highway Vehicles - Analyst Blog


Polaris Industries Inc. ( PII ) announced that it would recall 4,500 units of its 2011 Polaris Ranger RZR XP 900 recreational off-highway vehicles due to a potential burn hazard. The vehicles were sold across the U.S. between May 2012 and February this year with a price tag in the range of $16,000 to $16,600.

The snowmobile and all-terrain vehicle (ATV) maker revealed that due to a problem the firewall in back of the driver and passenger seats can overheat and melt. So far, the company has received a report of a consumer suffering burn injuries to a finger due to the problem.

Polaris advised the vehicle owners to stop driving the vehicles immediately and contact its dealers for a free repair. The company has also contacted some customers directly.

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.

The Transportation Department of U.S. slapped a fine of $17.35 million on Toyota 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 latest 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.

Recently, General Motors Company ( GM ) expanded its 2012-late Aug recall of 249,260 units of midsize sport utility vehicles (SUVs) by 231,000 units after receiving more reports of vehicle fires and minor injuries related to potential fire hazard led by an electrical short in the vehicles.

General Motors' recall covered Chevrolet Trailblazer and GMC Envoy SUVs as well as Buick Rainier, Saab 9-7X and Isuzu Ascender SUVs, all from the 2006-2007 model years. Of the total 480,000 vehicles, about 443,000 units are recalled in the U.S.

Currently, shares of Polaris retain a Zacks Rank #3 (Hold). Other stocks that are currently performing well in the industry where Polaris operates include Black Diamond, Inc. ( BDE ) with a Zacks Rank #2 (Buy).

BLACK DIAMOND (BDE): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

POLARIS INDUS (PII): 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: ATV , BDE , GM , PII , TM



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