was just a big Memorization Listed on the website of the National Highway Transportation Safety Administration. There’s a good reason why it shouldn’t hurt the auto company’s stock.
Investors are focusing a lot on the recall. They really don’t need to be.
NHTSA announced that Ford (ticker: F) is recalling 1,280,726 Ford Fusion and Lincoln MKZ vehicles to fix a front brake hose that may have ruptured.
The date of recall is March 10. The recall date usually appears a few days after the date of the recall notice on the NHTSA website.
The dealer will replace the hose free of charge.
More than a million cars is a lot for one recall. Prior to this recall, the top 12 auto makers in the US recalled nearly 26 million vehicles last year through 407 separate recalls. The average recall affects about 64,000 cars.
Still, Ford stock isn’t doing much in Friday trading relative to the market. Shares are down 0.9%.
Dow Jones Industrial Average
Futures closed 0.7% and 0.8%, respectively.
Ford stock shouldn’t do much on this recall. The cars affected are 2013 to 2018 models. Ford doesn’t make the Fusion or MKZ anymore. Of course, durability and quality matter to all auto manufacturers, but car buyers take this into account when buying a vehicle. For investors, all information available in the market is converted into sales and profit margins.
Investors have been more focused on vehicle recalls, and that should even qualify as a recall, thanks mostly to the recent
About 3.8 million vehicles have been recalled in the US through 20 separate recalls over the past 12 months.
Tesla’s largest recall also affected more than one million vehicles. A closed window may have exerted too much force. The problem was fixed with an over-the-air software update. Over the past year, over 99% of Tesla recalls have been fixed through software.
Some recalls matter to investors. They are those that have an unusual cost to fix or have very serious safety consequences.
NHTSA requires a recall for any issue that represents a safety risk. This is a good policy. Still, many car owners don’t become aware of the recall until they take their cars in for routine maintenance.
Write to Al Root at [email protected]