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Toyota (TM) Recalls 1M Vehicles Over Faulty Airbag Issue

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Per AP, Toyota Motor Company (TM - Free Report) announced that it issued another massive recall consisting more than one million vehicles, globally. The vehicles have faulty airbags that might inflate without a crash or fail to inflate in case of an accident.

In the United States, the recall consists of around 17,000 Scion xA, a five-door subcompact hatchback offered between 2004 and 2006. In other countries — including Japan and European countries — the recall covers Isis, Avensis, Avensis Wagon, Allex, ist, Wish, Corolla, Corolla Spacio, Corollo Verso, Corolla Fielder, Corolla Runx and Sienta models. All the cars were manufactured between July 2002 and June 2015.

Customers of the affected vehicles will be notified about the airbag control unit replacement in December, which will be replaced by the dealers.

Toyota Motor Corporation Price and Consensus

 

A day before, Toyota announced another worldwide recall consisting more than 400,000 vehicles, along with Subaru Corporation, per The Wall Street Journal. The recalled vehicles have defective engines that could stop engine valves from opening while fuel is combusted, which might lead to accidents or severe engine damage. Out of the total, Toyota’s vehicle count is 80,000 while the rest are of Subaru. Further, out of Subaru’s total count, 100,000 were sold in Japan.

Of late, Toyota has been involved in several vehicle recalls, similar to other automakers across the globe. In the last month, the company announced a massive safety recall of 2.43 million gasoline hybrid vehicles in Japan, the United States and other markets. Notably, the recalled cars include Toyota’s Prius and Auris models, which were manufactured between October 2008 and November 2014.

Price Performance

In the past three months, Toyota’s stock has lost 10.1%, outperforming 18.8% decrease recorded by the industry it belongs to.

 



Zacks Rank & Key Picks

Toyota currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are AutoZone, Inc. (AZO - Free Report) , Advance Auto Parts, Inc. (AAP - Free Report) and Allison Transmission Holdings, Inc. (ALSN - Free Report) . AutoZone and Advance Auto currently carry a Zacks Rank #2 (Buy) while Allison Transmission sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone has an expected long-term growth rate of 12.2%. Over the past six months, shares of the company have gained 17.2%.

Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have increased 42.1% over the past six months.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have rallied 6.7% over the past six months.

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