Product recalls are the precautionary steps taken to avoid
accidents due to any glitch in a vehicle. However, the recalls
dent the company's image and the 0.8% fall in
Toyota Motor Corp.
) shares on Mar 11 highlights that. The decline was due to the
news that Toyota has recalled 7,067 of its new Highlander
crossover SUVs. The recall is being made to fix a problem in the
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The recalled Highlander crossovers are from model year 2014.
According to The National Highway Traffic Safety Administration,
the middle seat belt of the third row is not properly secured to
the vehicle's floor. In case of a crash, a faulty seat belt will
increase the probability of injury. However, no cases of
casualties have been reported.
Toyota will be recalling the vehicles later this month. The
Toyota dealers will service the recalled Highlanders at no extra
charge. Toyota had commercialized the third-generation Highlander
The new 2014 Highlander comes with a new look, a sophisticated
cabin and better safety and technology. It offers a choice
between a four-cylinder, a V-6 and a hybrid engine.
Toyota witnessed several recalls in Feb 2014. On Feb 12, the
automaker announced the global recall of 1.9 million
third-generation Prius cars to repair a software problem in the
hybrid system. Following this, on Feb 14, Toyota recalled 295,000
vehicles of the Lexus and Toyota brands globally due safety
system problems involving stability control and anti-lock brakes.
261,114 of the total recalled vehicles of model years 2012 and
2013 were in the U.S.
Moreover, on Feb 17, Toyota announced its intent to recall 13,000
FJ Cruiser sport-utility vehicles in the Middle East, Australia,
Africa and Panama. The recall will be made to rectify fuel tubes
prone to overheating, which may cause them to melt, leading to
gas leaks. This defect has led to five fire reports, although
there is no report of casualty. The recalled FJ Cruisers were
manufactured in the Oct 2012-Jan 2014 period.
Currently, Toyota carries a Zacks Rank #2 (Buy). Some other
automobile stocks worth considering are
Tata Motors Ltd.
Honda Motor Co., Ltd.
). Daimler and Tata Motors carry a Zacks Rank #1 (Strong Buy)
while Honda is a Zacks Rank #2 stock.