Ford Motor Company (F - Free Report) announced a worldwide recall of around one million vehicles to replace Takata airbags, per AP. The airbags can explode when deployed, causing injury to passengers.
The recalled vehicles consist of the 2010 Ford Edge and Lincoln MKX, the 2010 and 2011 Ford Ranger, the 2010 to 2012 Ford Fusion and Lincoln MKZ, the 2010 and 2011 Mercury Milan, and the 2010 to 2014 Ford Mustang. Out of 953,000 vehicles, 782,000 are from the United States and territories while 149,652 are from Canada.
The company advised customers to get their vehicles checked at their dealerships. The frontal airbag inflator or module will be replaced by the dealers without any extra cost.
Ford Motor Company Price and Consensus
Additionally, Ford issued a recall for 87 2019 Ford Ecosport vehicles, per a report by Detroit Free Press. The front seats of the recalled vehicles are not fixed properly as a result of improper welding, which increases risks of injury in case of a car crash. Region wise, the recall consists of 63 vehicles in the United States and territories, and 13 in Canada. The faulty seats will be changed with new ones at Ford’s dealerships.
Apart from recalls for Takata airbag replacements, Ford has been frequently recalling vehicles, owing to faulty vehicle parts. In the last month, it announced a recall for 874,000 F-Series trucks in North America. Regular vehicle recalls not only add to the company’s expenses but also hurt consumers’ confidence in the brand.
In the U.S. auto sales, Ford witnessed a 3.5% year-over-year slump to 2.5 million vehicles in 2018. Further, this Detroit-based automaker’s December sales declined 8.8% year over year to 220,774 vehicles due to lower-than-expected sales of SUVs, trucks and vans. Each segment witnessed a drop in sales from the year-ago period.
Apart from decreasing sales in the United States, the company witnessed declining sales in China due to a volatile economy and high tariff-related costs in 2018. Worsening auto sales in Europe and China, along with its plan to restructure the business, compelled Ford to lower its earnings forecast for 2018. It expects yearly tariff-related costs of up to $1.6 billion in North America to hamper the profit margin in 2018.
Over the past six months, shares of Ford have lost 26% compared with the industry’s decline of 12.7%.
Zacks Rank & Stocks to Consider
Ford currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader auto sector are Bridgestone Corporation (BRDCY - Free Report) , Daimler AG (DDAIF - Free Report) and General Motors Company (GM - Free Report) . Bridgestone and Daimler currently carry a Zacks Rank #2 (Buy) while General Motors sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Bridgestone has an expected long-term growth rate of 4.7%. Share price of the company has increased 5.1% in the past six months.
Daimler has an expected long-term growth rate of 2.7%. Over the past month, shares of the company have gained 4%.
General Motors has an expected long-term growth rate of 8.5%. Shares of the company have gained 5.2% in the past three months.
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