General Motors (GM - Free Report) recently recalled more than 600,000 four-wheel drive trucks and SUVs as the braking system would get accidentally activated due to a software error, raising chances of a crash.
Per the company, 653,370 vehicles worldwide were potentially affected but no accidents have been reported. The latest safety recall includes the 2014-2018 Chevrolet Silverado 1500, 2015-2020 Chevrolet Suburban, 2015-2020 Chevrolet Tahoe, 2014-2018 GMC Sierra 1500 and 2015-2020 GMC Yukon models. General Motors will reprogramme the vehicles’ software free of charge.
The braking software activation is triggered by the failure of a wheel-speed sensor, resulting in unintended braking on the opposite wheel which would pull the vehicle to one side. Meanwhile, the two-wheel drive mode will eliminate the risks until repairs are done.
Frequent vehicle recalls are a major threat to auto companies. These not only result in significant expenses and lower vehicle resale value, but also involve reputational costs. Advanced technologies used in vehicles are resulting in more complex units, software errors and new dangers, leading to rise in recalls. Cost-cutting measures by automakers have also led to frequent recalls.
General Motors’ peer Ford (F - Free Report) also recently recalled roughly 300,000 North American vehicles for a trio of safety issues, largely resulting from driveshaft flexible coupling problems. The affected vehicles were manufactured between January 2014 and June 2017, including 293,558 vehicles in the United States and territories, 22,960 in Canada, and 2,744 in Mexico.
Zacks Rank & Stocks to Consider
Currently, General Motors carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Auto-Tires-Trucks sector are Spartan Motors, Inc. (SPAR - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and BRP Inc. (DOOO - Free Report) , carrying a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Spartan Motors has an estimated earnings growth rate of 54.17% for 2019. The company’s shares have surged roughly 122.5% in a year’s time.
BRP has a projected earnings growth rate of 18.49% for the current year. Its shares have gained around 15.8% over the past year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>