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Ford's (F) Chinese JV to Recall Kuga SUVs for Fuel Leak Risk

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Ford Motor Co. 's F Chinese joint venture, Changan Ford Automobile ("CAF"), is planning to recall Kuga SUVs manufactured between 2012 and 2014, to fix a possible fuel leakage problem.

According to China's quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine, the fuel tubes of these vehicles may get worn out due to friction caused while driving on bumpy roads. This may sometimes lead to fuel leakage. Around 220,000 Kuga vehicles are affected by this problem.

China is an important automobile market. However, sales have been dwindling in this market due to economic weakness. Ford reported a 2% year-over-year decrease in China sales to 88,692 vehicles in Sep 2015. Sales of Ford in the world's largest automobile market totaled 788,888 units in the first nine months of 2015. However, the figure dipped 1% from the same period of 2014.

Nevertheless, Ford is aiming to boost its market share in China. Recently, the company announced that it will invest nearly 11.4 billion Yuan ($1.8 billion) for research and development in the nation over the next five years. The automaker has been trying to enhance its sales in the Chinese market by modifying its vehicles to meet consumer preferences. As a result, it has gained significant market share over the last few years. Currently, Ford is the fifth largest foreign automaker in China, per Reuters. The top four positions are held by General Motors Company GM , Volkswagen AG VLKAY , Hyundai Motor Co. and Nissan Motor Co. Ltd. NSANY .

Ford will also expand its portfolio of hybrid, plug-in hybrid and electric vehicles in the nation over the next few years. Next year, it will launch the C-MAX Energi, a plug-in hybrid, and the Mondeo conventional hybrid in China.

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FORD MOTOR CO (F): Free Stock Analysis Report

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GENERAL MOTORS (GM): 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.

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