General Motors Recalls 100K Cadillac SRX SUVs in China

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General Motors Co. (GM) recently announced a recall covering more than 100,000 Cadillac SRX sport utility vehicles in China, according to media reports. A fault has been detected in the rear suspension component of the recalled vehicles.

General Motors’ Chinese joint venture with SAIC Motor Corp – Shanghai General Motors Co – announced that it will recall and fix 107,016 SUVs that were manufactured from Jul 2009 to last month. The automaker further stated that the vehicles have been found to have loose toe adjusters, which may lead to loss of control at highway speeds. This can also activate the vehicle’s electronic stability-control system, which may cause excessive erosion of the threads in the link. If the threads are lost then the rear suspension may make loud metallic noises, especially when the vehicle is traveling over undulating surfaces.

There have been reports of three crashes and two injuries due to the faulty rear suspension component.

General Motors is very optimistic about its performance in China. It expects Cadillac sales to rise to 70,000 units this year and 100,000 units next year. The company also expects that by the end of the decade 1 out of 10 vehicles sold in China will be a luxury one.

However, Shanghai General Motors recently announced a recall involving 38,328 Cadillac XTS sedans in the nation owing to a brake control software issue. The Cadillac vehicles being recalled have been manufactured in the Oct 2012–Jul 2014 period. A few drivers have complained of an acceleration problem in the vehicles owing to the faulty software.

General Motors currently carries a Zacks Rank #3 (Hold). Better-ranked automobile stocks worth considering include Tesla Motors, Inc. (TSLA), China Automotive Systems Inc. (CAAS) and Fox Factory Holding Corp (FOXF). While Tesla and China Automotive sport a Zacks Rank #1 (Strong Buy), Fox Factory carries a Zacks Rank #2 (Buy).

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