Yahoo Finance Volkswagen (VLKAY) to Recall Vehicles Over Lighting Defect
The recall issue is seemingly giving no respite to automakers around the world. Per Reuters, it has been reported in a German trade magazine Kfz-Betrieb that the German auto behemoth Volkswagen AG VLKAY has to recall around 700,000 Tiguan and Touran cars across the globe. This latest recall issue is likely to tarnish the image of this auto giant in the days ahead. A possible lighting defect has been cited as the reason for this recall.
As per the magazine, humidity can result into a short circuit in the affected vehicles’ roof strip. This may cause scorching damages on the roof or result in a fire. It has been reported that around 52,500 cars have been affected in Germany and the company is trying to reach a solution.
In fact, the case of recall is not new to Volkswagen. Per Reuters, in the middle of May, the company has announced that it is going to recall roughly 220,000 units of new Polo vehicles due to defective rear seatbelt lock. Additionally, 191,000 cars of the company’s Spanish subsidiary, Seat, were also affected.
Over the past year, shares of Volkswagen have outperformed the industry it belongs to. Over this time frame, shares of the company have increased 10.8%, whereas the industry decreased 4.2%.
Zacks Rank & Key Picks
Volkswagen currently carries a Zacks Rank #5 (Strong Sell). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF, Honda Motor Co., Ltd. HMC and AB Volvo VLVLY. While Fox Factory sports a Zacks Rank #1 (Strong Buy), both Honda and Volvo carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have gained 68.2%.
Honda has an expected long-term growth rate of 3%. Shares of the company have risen 9.7% in the past year.
AB Volvo has an expected long-term growth rate of 15%. Over the past two years, shares of the company have gained 52.8%.
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