Auto recalls have been on the rise in recent years and the issue is unlikely to wane anytime soon. Advanced technologies used in vehicles are resulting in more complex units, software errors and new dangers, in turn resulting in a rise in recalls. Cost-cutting measures by automakers have also resulted in frequent recalls. Recently, Ford F issued three safety recalls in North America.
The first recall concerns 558,610 vehicles over brake issue. The recall affects select 2015-18 Ford Edge and 2016-18 Lincoln MKX vehicles. The affected vehicles have a front brake jounce hose, which could rupture and cause fluid leak, increasing the risk of a crash. Dealers are set to replace defective front brake jounce hoses and the reference number for this recall is 20S42.
The second recall is for 3,597 Lincoln Corsair vehicles built at the Louisville Assembly Plant from Jan 7 to Oct 21, 2019 to fix a faulty rear coil spring. The coil spring could corrode and fracture before separating from the vehicle, which may cause a potential accident for the vehicles following behind, thereby increasing the odds of a crash. Dealers will carefully examine the vehicles and a new coil spring will be installed, if required. Reference number for this recall is 20S41.
The third recall is for select 2020 Ford F-150 pickups over battery connection issue. The recall affects 431 vehicles built at the Kansas City Assembly Plant from Jun 30 to Jul 1, 2020. The affected vehicles are likely to have been manufactured with an improper attachment nut, which is used to fasten the positive battery cable to the starter motor. The flawed attachment nut may not provide a secure connection and increase the potential of incremental heat generation, which could cause fire. Dealers will replace the nut and the reference number for this recall is 20S35.
Even last month, the U.S. auto biggie issued three safety recalls in North America. The first recall was for 24,584 Lincoln MKX and Nautilus vehicles over wiring defect. Another recall was for 1,330 Ford F-650 and F-750 vehicles, which were built without certain thermal protection components. The third recall was for 80 Ford Escape and Transit vehicles over airbag issue. The airbag curtain might not inflate properly, thereby increasing the chances of injury during a crash.
Frequent vehicle recalls pose a major threat to auto companies. These not only reduce consumers’ confidence in a brand, but also result in significant expenses and lower vehicle resale value.
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Ford currently carries a Zacks Rank #2 (Buy). Other top-ranked players in the auto space include General Motors GM, Polaris Inc. PII and Fox Factory Holding Corp FOXF. General Motors and Polaris sport a Zacks Rank #1 (Strong Buy), while Fox Factory carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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