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Toyota (TM) Set to Recall 70,000 Vehicles in North America

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Toyota Motor Corporation (TM - Free Report) has announced that it is recalling about 70,000 Toyota and Lexus branded vehicles in North America, per Associated Press. This Japanese auto giant intends to replace the airbag inflator in the vehicle as it can explode and project shrapnel at the driver and passengers. Among the total vehicles to be recalled, 65,000 are from the United States.

Toyota has informed that the replacement parts are available and the owners of the vehicles will be notified in 2019. The recall includes 2002 to 2005 Sequoia, 2003 to 2005 Corolla, 2003 to 2005 Tundra and 2002 to 2005 Lexus SC. Takata uses ammonium nitrate to generate a small explosion and to inflate the airbags. But it can deteriorate and burn too quickly, which eventually can blow the metal container apart. After this latest recall, Toyota will use inflators made by a different company with a relatively safe chemical.

In recent times, the company has been embroiled into several cases of recall. In early November, it issued a massive recall, consisting more than one million vehicles globally. The vehicles had faulty airbags that might inflate without a crash or fail to inflate in case of an accident. In October, Toyota made the announcement of recalling around 188,000 pickup trucks, sports utility vehicles and cars from all over the world due to faulty airbags.

In the past three months, shares of Toyota outperformed the industry it belongs to. Over this time frame, Toyota’s stock has lost 0.1% while the industry declined 15.5%




Currently, Toyota carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and America’s Car-Mart, Inc. (CRMT - Free Report) . While Allison Transmission and Fox Factory currently sport a Zacks Rank #1 (Strong Buy), America’s Car-Mart carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have increased 3.7%.

Fox Factory has an expected long-term growth rate of 17.9%. Over the past six months, shares of the company have risen 49.3%.

America’s Car-Mart has an expected long-term growth rate of 19.5%. Over the past six months, shares of the company have grown 12.3%.

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