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Volkswagen (VLKAY) to Issue Another Vehicle Recall in China
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Volkswagen Aktiengesellschaft will be recalling 577,590 Golf and Sagitar cars in China via its joint venture, FAW-Volkswagen Automobile Co Ltd. The affected cars have a headlight fuse defect that can lead to headlight safety risk or headlight failure.
The recall covers 416,364 Golfs produced between Sep 2009 and May 2014, as well as 161,226 Sagitars produced between Jul 2010 and Mar 2012. Last year, the company delivered almost 4 million vehicles in China.
Earlier in March, Volkswagen recalled over 1 million Audi vehicles due to potential leaks and coolant pumps faults.
Lately the company has issued a number of recalls, primarily related to the emissions scandal. The company has paid $2.9 billion through Feb 18, to buy back almost 138,000 affected vehicles as per a court document.
Last year, Volkswagen had agreed to spend $10.3 billion to repurchase up to 487,000 polluting 2-liter vehicles that had a special software installed to enable them to use unfair means to clear the emission tests. In Feb 2017, the company was granted the option to pay $1.22 billion to fix or repurchase almost 80,000 3-liter vehicles by a federal judge. These vehicles contain an auxiliary emissions system that emits over nine times the permissible limit.
Volkswagen will also have to pay up to $4.04 billion if it is not granted the approval to fix all the luxury Porsche, Audi and VW diesel 3-liter vehicles in the settlement. In aggregate, the company has agreed to spend up to $25 billion in the U.S. to settle claims with owners, regulators, dealers and buy back affected vehicles. Under an agreement, the company has agreed to plead guilty for installing secret software in its vehicles to clear the emission tests by using unfair means in three felony courts in Detroit.
For fiscal 2017, management expects deliveries to increase moderately from 2016, although market conditions are expected to be challenging. Intense competition, volatile exchange rates and consequences of the emission scandal are expected headwinds.
Price Performance
Volkswagen outperformed the Zacks categorized Automotive-Foreign industry in the last three months. Share price of the company increased 5.8%, while the industry saw a 5.4% decrease. The company has been seeing higher demand despite the crisis.
Zacks Rank & Other Stocks to Consider
Volkswagen currently carries a Zacks Rank #2 (Buy).
Other top ranked companies in the auto space include Ferrari N.V. (RACE - Free Report) , Fiat Chrysler Automobiles N.V. and Standard Motor Products, Inc. (SMP - Free Report) .
Fiat has an expected long-term growth rate of 22.4% and carries a Zacks Rank #2.
Standard Motor, also a Zacks Rank #2, has an expected long-term growth rate of 7%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Volkswagen (VLKAY) to Issue Another Vehicle Recall in China
Volkswagen Aktiengesellschaft will be recalling 577,590 Golf and Sagitar cars in China via its joint venture, FAW-Volkswagen Automobile Co Ltd. The affected cars have a headlight fuse defect that can lead to headlight safety risk or headlight failure.
The recall covers 416,364 Golfs produced between Sep 2009 and May 2014, as well as 161,226 Sagitars produced between Jul 2010 and Mar 2012. Last year, the company delivered almost 4 million vehicles in China.
Earlier in March, Volkswagen recalled over 1 million Audi vehicles due to potential leaks and coolant pumps faults.
Lately the company has issued a number of recalls, primarily related to the emissions scandal. The company has paid $2.9 billion through Feb 18, to buy back almost 138,000 affected vehicles as per a court document.
Last year, Volkswagen had agreed to spend $10.3 billion to repurchase up to 487,000 polluting 2-liter vehicles that had a special software installed to enable them to use unfair means to clear the emission tests. In Feb 2017, the company was granted the option to pay $1.22 billion to fix or repurchase almost 80,000 3-liter vehicles by a federal judge. These vehicles contain an auxiliary emissions system that emits over nine times the permissible limit.
Volkswagen will also have to pay up to $4.04 billion if it is not granted the approval to fix all the luxury Porsche, Audi and VW diesel 3-liter vehicles in the settlement. In aggregate, the company has agreed to spend up to $25 billion in the U.S. to settle claims with owners, regulators, dealers and buy back affected vehicles. Under an agreement, the company has agreed to plead guilty for installing secret software in its vehicles to clear the emission tests by using unfair means in three felony courts in Detroit.
For fiscal 2017, management expects deliveries to increase moderately from 2016, although market conditions are expected to be challenging. Intense competition, volatile exchange rates and consequences of the emission scandal are expected headwinds.
Price Performance
Volkswagen outperformed the Zacks categorized Automotive-Foreign industry in the last three months. Share price of the company increased 5.8%, while the industry saw a 5.4% decrease. The company has been seeing higher demand despite the crisis.
Zacks Rank & Other Stocks to Consider
Volkswagen currently carries a Zacks Rank #2 (Buy).
Other top ranked companies in the auto space include Ferrari N.V. (RACE - Free Report) , Fiat Chrysler Automobiles N.V. and Standard Motor Products, Inc. (SMP - Free Report) .
Ferrari has an expected long-term growth rate of 14.1% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fiat has an expected long-term growth rate of 22.4% and carries a Zacks Rank #2.
Standard Motor, also a Zacks Rank #2, has an expected long-term growth rate of 7%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>