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AutoNation's (AN) Shares Rally on New Recall Policy

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Shares of automotive retailer AutoNation, Inc.AN inched up 2.5% to $58.77 on Sep 8, after the company announced a new recall policy. AutoNation stated that it will not sell, lease or wholesale any of its vehicles that are under an open safety recall. This policy will be applicable for all of the 293 vehicle franchises of the company across the U.S.

AutoNation believes that it is the retailer's responsibility to advice customers against buying vehicles which have a recall running as most customers are oblivious to such developments. Thus, the company will identify the vehicles and take them off showrooms till the safety issues are taken care of.

This move will increase the inventory of AutoNation as the necessary parts of the recalled vehicles are not always available. However, the company believes that such expenditures are worth incurring when it comes to ensuring customer safety.

AutoNation further revealed that this policy will also be applicable to its vehicle inventory that is not on its sales floor. The company will not wholesale any vehicle that has an open safety recall in order to get rid of its inventory. The company is adopting initiatives to identify the faulty vehicles and separate them from its inventory.

AutoNation currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the auto industry include Ford Motor Co. F , Continental Aktiengesellschaft CTTAY and Wabash National Corp. WNC , all carrying a Zacks Rank #2 (Buy).

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FORD MOTOR CO (F): Free Stock Analysis Report

AUTONATION INC (AN): Free Stock Analysis Report

WABASH NATIONAL (WNC): Free Stock Analysis Report

CONTL AG-SP ADR (CTTAY): 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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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