Boston, MA 12/30/2013 (wallstreetpr) – A Chinese quality watchdog statement, released last week Friday stated that Ford Motor Company (NYSE:F) will recall about 80,000 vehicles, mostly Kuga sport-utility over steering problems. The statement by General Administration of Quality Supervision, Inspection and Quarantine said that the Ford Motor Company (NYSE:F)’s vehicle recall will start by February 2014.
But it is not just Ford Motor Company (NYSE:F) that has been hit with this recall problem. General Motors Company (NYSE:GM) is also expected to recall about 1.46 million vehicles, mostly Buick and Chevrolet. For General Motors Company (NYSE:GM), the problem is related to fuel-pump brackets which are believed to be defective and could lead to leaks and thus a safety threat. The General Motors Company (NYSE:GM) recall starts this week.
Impact on reputation
Recall of products due to defects, is something that happens in most of the industries. However, it is not one of the best things which executives enjoy doing, because it is more often than not has reputation impact on the company.
In any case, at the time when gasoline carmakers are fighting for market control against electric cars, like those made by Tesla Motors Inc (NASDAQ:TSLA), vehicle recall due to safety reasons only serves to put more ammunition into the hands of the opponents.
Auto market situation
After having impressive run in 2013, Ford Motor Company (NYSE:F) is expected to maintain its growth through 2014 and beyond. However, the company issued a reality check recently when the management announced that it expected profits to fall in 2014 due to huge expenditure related to the release of its 23 new vehicles.
Ford Motor Company (NYSE:F) is still wrestling with General Motors Company (NYSE:GM) for the control of the U.S. and emerging auto markets. Recently the two companies are seen increasing their investment in emerging markets to add more customers to their list.
At the moment, China remains the ultimate prize and every player in the auto industry is vying for the greater control of the market. The latest data suggests that German’s Volkswagen realized the most sales in the China market this year, followed by General Motors Company (NYSE:GM). However, Ford Motor Company (NYSE:F) is expected to top this list in the upcoming years, especially if its seven new vehicles targeted at the global markets are able to charm customers in China.
