Ford Motor Co. (F) plans to recall 260 units of imported Windstar minivans in China in order to fix some connection problems. The problems may lead to loss of control of the vehicle.
Ford had already recalled Windstars twice since last year due to a corrosion-related problem. The first installment involved 575,000 units of the lineup. National Highway Traffic Safety Administration (NHTSA) had found that the rear axle of the vehicles appears to collect road slush in cold weather, leading to rust. The recall affected Windstars that were manufactured between 1998 and 2003.
The second installment included 525,000 units of the minivans that were manufactured from 1999 to 2003. About 425,000 units of the recalled vehicles are registered in the U.S, about 100,000 units in Canada, and fewer than 750 units in other countries.
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.
In 2011 till date, Ford has recalled more than 1 million vehicles. There have been more than nearly 600,000 vehicles recalls throughout 2010.
China has always been a high priority market for Ford. The automaker has been pursuing a major expansion plan in the country in order to tap its growing market potential. Since last year, it has invested $510 million in China.
Last year, Ford added 40 new dealerships in China as a part of its expansion plan. Further, the automaker plans to add 66 new dealerships by the end of the year, raising its total dealerships to 340 in the country.
Ford’s sales in China grew 40% in 2010 as customers driven by higher sales of Focus compact and Fiesta subcompacts. Changan Ford sold 403,283 vehicles, an increase of 34% from the last year. Meanwhile, Ford’s commercial vehicle venture in China, Jiangling Motors Corp., reported an impressive 56% rise in sales to 178,999 units.
Ford, a Zacks #3 Rank (Hold) stock, posted a 24% fall in profit to $1.2 billion or 30 cents per share (before special items) in the fourth quarter of 2010 from $1.58 billion or 43 cents per share (before special items) in the same quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $32.5 billion. However, excluding revenues from Volvo, sales improved by $1.6 billion or 5% from the fourth quarter of 2009.
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