General Motors Company (GM) announced that it would recall 16,618 units of Chevrolet Captiva and Opel Antara crossover sports utility vehicles (SUVs) in China due to a problem with the antilock braking system in the vehicles. The recall involves vehicles that were manufactured between April 11, 2006, and November 9, 2009.
An anti-lock braking system or ABS is an advanced braking system that improves the vehicle stability by controlling the braking distances after obtaining the steering inputs from the driver regarding the road surfaces. For example, the mechanism can reduce the braking distances on dry and slippery surfaces and enhance the same on loose surfaces such as gravel or snow.
This is the second recall of GM in China in less than 3 months. A couple of months back, Shanghai GM – a joint venture with Shanghai Automotive Industry Corporation (SAIC) – had recalled 9,862 units of 2011 Cadillac SRX model due to defective transmission systems.
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. also imposed a fine of $48.4 million on the company due to late recall of millions of defective vehicles.
GM, a Zacks #3 Rank (Hold) company, posted a profit of $0.7 billion or $0.39 per share in the fourth quarter of 2011, missing the Zacks Consensus Estimate by $0.03 per share. The results excluded net loss from special items of $0.2 billion or $0.11 per share. It compared with the profit of $0.9 billion or $0.52 per share in the fourth quarter of 2010.
Revenues in the quarter scaled up 3% to $38.0 billion, which was in line with the Zacks Consensus Estimate. Unit sales escalated 3% to 2.2 million vehicles from the fourth quarter of 2010. The automaker occupied a market share of 11.7% during the quarter, up from 11.5% in the year-ago quarter.
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