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Auto Stock Roundup: F to Recall to Fix Glitches, VWAGY to Build Electric SUVs for China

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Auto giant Ford Motor Company (F - Free Report) made the announcement that it will recall 327,000 F-Series pickup trucks for the second time to fix the damage that occurred due to a previous recall in December 2018. Recalled vehicles include 2015-19 F-150 and 2017-19 Super Duty trucks in North America, equipped with engine block heaters. This recall issued by the company in North America was made to solve problems associated with engine block heater cables that could lead to fire.

German auto giant, Volkswagen AG (VWAGY - Free Report) disclosed its plan to build fully-electric sports utility vehicles for the China market. This latest move is in sync with the growth strategy in China. This move was also taken to compete with Tesla, Inc.’s (TSLA - Free Report) Model X.

(Read the previous roundup here: Auto Stock Roundup for Apr 11, 2019)

Recap of the Week’s Most Important Stories

1.    Meritor, Inc. introduced the range of braking solutions to cater to multiple off-highway applications. The recently added brake options boost the company’s modular brake portfolio and wheel-ends for various market segments. A few of the newly added brake solutions include a high-capacity hydraulic disc brake, a full line of wet disc brakes and a 500-mm drum brake.

The Troy, MI-based automotive parts manufacturer and supplier’s wet disc brakes are available in numerous configurations, with diameters ranging from 228 mm to 460 mm, making these suitable for vehicles that function in extreme conditions. Further, the new 500-mm drum brake comprises Meritor’s S-cam design and lining materials that will help it deliver good performance in a compressed package. The brake is eligible for off-highway trucks that have large wheel and tire combinations, and vehicles that require higher brake torque.

Meritor supplies a wide range of equipment that is vital for manufacturing robust and competent commercial vehicles. It offers drivetrain, mobility, braking and aftermarket solutions. The new brake lineup in combination with the company’s global carriers and wheel-ends are expected to fulfill customer requirements worldwide. Additionally, regional manufacturing hubs, combined with its vertically integrated short lead times, will support Meritor in delivering world-class products in a short span. (Read more: Meritor Introduces Braking Options for Off-Highway Market)

Meritor currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

2.    Ford announced that it is recalling 327,000 F-Series pickup trucks for the second time to repair the damage that occurred from a previous recall in December 2018, per Associated Press. Recalled vehicles include 2015-19 F-150 and 2017-19 Super Duty trucks in North America, equipped with engine block heaters. This recent recall in North America has been made to solve problems associated with engine block heater cables that could lead to fire.

Notably, in December 2018, the company recalled 874,000 trucks as water and contaminants could lead to corrosion of cables. This could also have caused short-circuits and fire. At the time of the previous recall, heater cables might have damaged inadvertently during servicing. This could damage the engine block heater, making it inoperative, which may in turn lead to higher risks of excess heating or fire.

Now, the dealers will disable and replace heater cables of the recalled vehicles with new ones.

Frequent vehicle recalls due to safety issues are concerning Ford. In February 2019, it issued a recall for roughly 1.5 million Ford and Lincoln vehicles, owing to flawed downshift to first gear. In January 2019, it issued two recalls comprising roughly 1 million vehicles worldwide. (Read more: Ford to Fix Glitches in Vehicles From Previous Recall)

Ford currently carries a Zacks Rank #3 (Hold).

3.    Volkswagen revealed that it plans to build fully electric sports utility vehicles for the China market, the largest car market in the world, per Reuters. This latest move by the German auto giant is in sync with the aggressive growth strategy in China, where electric vehicle manufacturers are treated preferentially. Also, the proposed launch of the fully electric vehicles by Volkswagen in China from 2021 is aimed at competing with Tesla Model X.

Volkswagen’s chief executive officer Herbert Diess claims that ID ROOMZ will be the key electric vehicle to be launched in China. A team of engineers is working on ID ROOMZ and the company intends to produce over 22 million electric vehicles in the next decade.

Also, Volkswagen and its Audi brand will combine R&D operations in China to improve research and development capabilities.

Thomas Ulbrich, the head of e-mobility of Volkswagen stated that by mid-2023, it will start ramping up the production of 33 electric vehicles. The company will use VW Group’s modular electric car (“MEB”) platform to build electric cars for VW, Skoda, Seat and Audi brands. In order to increase the mass production of electric vehicles, VW Group is converting 16 factories across the globe. (Read more: Volkswagen to Ramp up Production of Electric SUV in China)

Volkswagen currently carries a Zacks Rank #3.

4.    CNH Industrial N.V. (CNHI - Free Report) collaborated with seven companies to develop ConectarAGRO, with the intention to bring open connectivity solutions to all of Brazil’s agricultural regions.

This initiative will enable Brazil’s rural producers to take advantage of precision farming, and digital and automated technological resources. Also, this will provide access to a range of new products and services enabled by connectivity, which will in turn result in business optimization.

CNH Industrial collaborated with AGCO, Bayer, Jacto, Nokia, Solinftec, TIM and Trimble. The combination of these diverse and competent companies created the environment for understanding the connectivity issue faced by the Brazil agricultural sector in a better way. This also sets up the ideal platform for finding solutions and improving domestic agribusinesses.

ConectarAGRO initiative offers uniform and open technologies, thereby ensuring more freedom and flexibility for farmers. This program will bring people, equipment and other devices under a single platform. In other words, ConectarAGRO will be vital for augmenting the productivity and competitiveness of Brazil’s agribusinesses. (Read more: CNH Industrial Builds ConectarAGRO for Brazil's Agribusiness)

CNH Industrial currently carries a Zacks Rank #5 (Strong Sell).

Performance

Last week, Harley-Davidson, Inc. (HOG - Free Report) gained the maximum while Tesla declined the most.

In the past six months, AutoZone, Inc. (AZO - Free Report) has increased the most.

CompanyLast WeekLast 6 Months
GM1.9%28.1%
F1.8%11.8%
TSLA-1.7%9.5%
TM1.6%4.4%
HMC0.8%4.2%
HOG4.3%3.7%
AAP-1.1%7.6%
AZO-0.8%44.9%


What’s Next in the Auto Space?

Watch out for the usual news releases and the earnings releases over the next week.

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