By Surojit Chatterjee: Subscribe to Surojit's RSS feed
July 9, 2010 5:17 PM EDT
US automakers Ford Motor Co. (NYSE.F) and Chrysler group LLC said, Friday, that they are recalling nearly 56,000 vehicles combined, citing safety concerns. Ford's shares rose as investors shrugged off the news, assuming that the company is swiftly dealing with the issue.
In independent statements, Ford said it is recalling 33,728 of its 2010 Transit Connect vans while Chrysler said it is recalling 22,118 of its 2010 Dodge Nitro, Dodge Ram, Jeep liberty and Jeep Wrangler models.
Ford said it would fix the pushpins holding the overhead material in the headliners. The pushpins do not meet federal requirements for head protection, the company said. The recalled vehicles were manufactured between December 5, 2008 and May 31, 2010, it added.
Chrysler said its vehicles may have defective brake tubes that could lead to a loss of brake fluid and compromise the braking performance of the vehicles.
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Both the companies said they haven't received any reports of accidents or injury relating to the problems.
The recalls are voluntary in nature, both the companies said, adding that they will notify customers individually in the coming weeks, over the phone or through mail, instructing them to take the recalled vehicles to their local dealers and get the problems fixed free of charge.
The automakers said they have also informed the National Highway Traffic Safety Administration (NHTSA) and the US Transportation Department about the safety hazards concerning their vehicles and are coordinating closely with them.
Market analysts said the recalls by the US automakers will not affect their future sales. In June, US sale of Ford and Chrysler vehicles rose 13 percent and 35 percent respectively compared to year ago period. At 1.06PM (EDT), shares of Ford were trading up 1.69 percent at $10.80 on the New York Stock Exchange.
The two companies, analysts said, were quick to announce the recalls.
In particular, Chrysler, which is being managed by Italy's Fiat SpA following last year's bankruptcy reorganization, is expected to post robust sales growth in coming months. The company recently had announced that to boost its sales it would offer incentives to customers. Customers, Chrysler said, would be allowed to return new vehicles within 60 days if they're not happy with their purchase. The company also said it would relieve customers from making the first two months' payments, up to a maximum of $1000 if the customers opt for EMI plan.
However, the same could not be said of Japan's Toyota Motor Corp (TYO.7203). Earlier this week, the world's No.1 automaker kicked off a global recall of 270,000 units of its popular, top-end Lexus and Crown cars to address concerns relating to faulty valve springs in the engine. The recall involves nearly 139,000 cars in the US and about 92,000 cars in Japan.
Toyota shares closed down 0.32 percent at 3120 yen on the Tokyo Stock Exchange.
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