Harley-Davidson Inc. (HOG - Free Report) is recalling some 2014 Touring motorcycles to fix a hydraulic clutch system that may create safety issues. The company is recalling 25,185 Touring motorcycles of models FLHTCU, FLHTK, FLHTP, FLHX, FLHXS, FLHTKSE and FLHRSE. It is also recalling 3,861 Softail CVOs and Trikes, models including FLHTCUTG, FXSBSE and FLSTNSE, manufactured from May 3, 2013, to Oct. 14, 2013.
It is feared that the hydraulic clutch system may be unable to generate enough lift to disengage the clutch in some cases. In this situation, reducing the speed of the motorcycle or stopping it might be difficult. This might lead to an accident.
Harley-Davidson is also taking the initiative to issue a Do Not Ride notice to the customers and a Do Not Deliver notice to the dealers until the motorcycle is repaired. Once a customer contacts the company’s dealer, Harley-Davidson will complete the necessary inspection and repair in less than an hour. The owners don’t have to bear any charges for the repair.
Product recalls can seriously dent a brand’s image. Recalls, amid the competitive scenario, will adversely affect the company’s brand value.
However, Harley-Davidson is not alone in recalling products. In Sep 2013, Toyota Motor Corp. (TM) recalled 615,000 Sienna minivans in the U.S. The automaker is recalling the vehicles of model years 2004-2005 and 2007-2009 to fix a problem in the shift lever assembly.
Currently, Harley-Davidson retains a Zacks Rank #3 (Hold). In the same industry, Ford Motor Co. (F) and General Motors (GM), each carrying a Zacks Rank #2 (Buy), are worth a look at the moment.