General Motors Co. (GM) announced that it would recall 2,100 units of Cruze due to a problem with their steering wheel, which came loose in one of the sedans. Consumer Reports stated that the steering wheel in the vehicle had been installed improperly.
GM did not find similar defect in any other vehicles from the 2011 model year Cruzes. Nevertheless, it will notify the owners of the sedans regarding the recall by tomorrow as the defect could lead to a crash when it is being driven.
GM launched Cruze overseas in late 2009 and then in the U.S. in September 2010. It replaced the Chevrolet Cobalt in the U.S. and other models overseas.
Soon after its launch, Cruze became the top selling model of the company. Last year, GM sold more than 365,000 Cruzes in more than 90 countries.
In the first quarter of 2011, the automaker sold more than 50,000 units of the sedan in the U.S. The model drove the sales gain of 17% in March for GM. GM asserted that Cruze is the model that is attracting buyers to the Chevrolet brand.
Automotive safety recalls were brought into focus by media after Toyota Motors’ (TM) announcement of the largest-ever global recall of 14 million vehicles since November 2009.
The Japanese automaker’s recall was related to problems such as faulty accelerator gas pedals and slipping floor mats as well as defective braking systems. The Transportation Department of U.S. also imposed a fine of $ 48.4 million due to late recall of millions of defective vehicles.
Since the beginning of 2010, GM recalled about 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall was made in June, involving 1.5 million vehicles, in order to fix a problem with a heated windshield wiper fluid system that has been causing fire in the vehicles.
At the beginning of last month, GM recalled 10,000 units of its mid-size luxury sedan, Buick LaCrosse, and mid-size crossover SUV, Cadillac SRX, in order to fix a software glitch. The bug in the software system is preventing the defroster in the vehicles from clearing the windshield, thereby affecting the driver's visibility.
GM, a Zacks #3 Rank (Hold) stock, posted a profit of 52 cents per share in the fourth quarter of 2010, exceeding the Zacks Consensus Estimate by 5 cents per share. The results excluded net charges of $ 400 million due to the previously disclosed $ 700 million loss on the purchase of U.S. Treasury preferred shares.
In absolute terms, the company turned a profit of $ 510 million during the quarter in sharp contrast to a loss of $ 3.52 billion in the comparable quarter of 2009 driven by the recovery in the North American and European automotive markets.
The automaker generated revenues of $ 36.9 billion during the quarter, which was higher than the Zacks Consensus Estimate of $ 34.9 billion. Unit sales escalated 11% to 2,173 vehicles from 1,952 vehicles in the fourth quarter of 2009. The automaker occupied a market share of 11.5% during the quarter, up from 11.4% in the year-ago quarter.
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
Zacks Investment Research
Be the first to comment