Ford Motor Co. (F) has recalled its Figo and Classic cars in India in order to investigate problems with their rear twist beams and power steering hoses. The company did not disclose the number of recalled cars, which were manufactured between January 2008 and December 2010.
Ford suspected a potential crack in the rear twist beam in the vehicles, which could lead to the car being inoperable. It will also inspect the problem with the power steering hoses in the vehicles, which could result in oil leakage and even fire in extreme cases. The automaker has not yet received any reports of injuries or accidents due to the defects.
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.
Last month, Ford had recalled 8,266 units of its recently launched Escape compact sport-utility vehicles (SUVs) in the U.S. in order to fix their improperly installed carpet padding. The 2013 model year vehicles were manufactured between March 8 and June 7 this year at the company’s retooled Louisville Assembly plant.
Ford, a Zacks #4 Rank (Sell) stock, posted a 39% fall in profits of $1.20 billion or 30 cents per share in the second quarter of the year from $1.98 billion or 49 cents in the corresponding quarter of 2011 due to lower operating results in all the regions except North America. However, the company’s profits were higher than the Zacks Consensus Estimate of 28 cents per share.
Revenues in the quarter dipped 6% to $33.3 billion, due to the same factors mentioned above. However, it exceeded the Zacks Consensus Estimate of $32.0 billion. In the first half of the year, Ford’s U.S. total market share was 15.4% in the U.S. and 8.1% in Europe.
Ford anticipates market share in the U.S. and Europe to be lower than 16.5% and 8.3%, respectively in 2011. It also expects the overall pre-tax operating profit to be lower than 2011 compared with the prior guidance of tallying. Operating margin in the Automotive segment is anticipated to be equal or lower rather then the prior guidance of improve over 5.4% in 2011.
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