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Fiat Chrysler Recalls 1.6M Vehicles to Fix Takata Airbags

Zacks Equity Research

Fiat Chrysler Automobiles N.V. FCAU announced a worldwide recall of 1.6 million vehicles to fix faulty Takata airbag inflators, per AP. The company’s recall is part of the ongoing recall campaign managed by the National Highway Traffic Safety Administration.

The company’s recall consists of vehicles from the model year 2010 through 2016. A few of the vehicle models that are covered in the recall are Jeep Wrangler SUV, 2010 Ram 3500 pickup and 4500/5500 Chassis Cab trucks, 2010 and 2011 Dodge Dakota pickup, 2010 through 2014 Dodge Challenger muscle car, 2011 through 2015 Dodge Charger sedan, and 2010 through 2015 Chrysler 300 sedan.

The car owners will be informed about the recall and will be instructed to visit dealers for inflator replacement. Although the company is unaware of any injuries for the recalled vehicles due to faulty Takata airbags, Fiat Chrysler urges its customers to get the repairs done at the dealers.

Fiat Chrysler Automobiles N.V. Price and Consensus

 

Fiat Chrysler Automobiles N.V. Price and Consensus | Fiat Chrysler Automobiles N.V. Quote

Out of the vehicles recalled, roughly 1.4 million cars are from the United States. The recall is part of the largest recall campaign in the United States’ history. Roughly 10 million inflators have been recalled this year. Apart from Fiat Chrysler, other automakers namely Ford Motor Company, Honda Motor Co., Ltd. and Toyota Motor Company recently announced recalls, owing to the same issue.

Per the government’s 2018 annual report, one-third of the total recalled vehicles, having faulty Takata airbag inflators, are yet to be fixed, even after more than three years of U.S. National Highway Traffic Safety Administration handling the issue. Around 16.7 million faulty inflators are outstanding to be fixed out of total 50 million. As accidents related to faulty inflators can be life-threatening, the inflator replacement completion should have been at a much faster pace.

Price Performance

Over the past three months, shares of Fiat Chrysler have gained 0.3% compared with the industry’s increase of 5.3%.

 



Zacks Rank & Stocks to Consider

Fiat Chrysler currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader auto sector are Bridgestone Corporation BRDCY, Genuine Parts Company GPC and Fox Factory Holding Corporation FOXF, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bridgestone has an expected long-term growth rate of 4.7%. Share price of the company has increased 4.5% in the past three months.

Genuine Parts has an expected long-term growth rate of 5%. Over the past three months, shares of the company have gained 0.6%.

Fox Factory has an expected long-term growth rate of 17.9%. Shares of the company have gained 5.5% in the past three months.

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