General Motors Recalls 1.5 Million Cars In China

General Motors Recalls 1.5 Million Cars In China

Shanghai General Motors Co. Ltd, the joint venture of General Motors Company (NYSE:GM) with SAIC Motor Corporation Limited (SHA:600104) will recall approximately 1.5 million vehicles including Buick and Chevrolet models in China due to potential safety problems.

General Motors to recall vehicles on December 30

According to the General Administration of Quality Supervision, Inspection and Quarantine in China, the recall involves models manufactured between 2006 and 2011. The joint venture will start recalling the affected vehicles on December 30.

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The affected Buick and Chevrolet models were locally manufactured. The quality regulator said Shanghai General Motors Co. Ltd and SAIC Motor Corporation Limited (SHA:600104) need to recall the vehicles to replace defective brackets, which secure the fuel pump.

Chevrolet Sail part of recalled vehicles

An executive from General Motors Company (NYSE:GM) based in Shanghai said Chevrolet Sail, a model exported in emerging markets is part of the recalled vehicles. Yale Zhang, head of the Automotive Firesight, a consulting firm in Shanghai opined that the GM recall was big given the fact that Buick Excelle and Chevrolet Sail are mainstream and high-volume cars. However, Zhang noted that the cause of the recall seemed not too serious.

“General Motors has warned that the affected component might crack after long use and lead to fuel leakage, but in real life it doesn’t appear to have happened. There’re so many recalls these days, and some automakers call back products proactively more as a precaution. In this case, the recall shouldn’t affect GM’s reputation in China that much,” said Zhang.

General Motors’ sales in China

General Motors Company (NYSE:GM) sold 2.89 million vehicles in China from January to November this year. Its sales performance in the country increased by 11.4% compared to last year. The U.S. automaker is manufacturing vehicles locally in partnership with SAIC Motor Corporation Limited (SHA:600104) and China FAW Group Corporation.

The Chinese quality regulator also announced that Ford Motor Company (NYSE:F) and its partner, Chongqing Changan Automobile Company Ltd (SHE:200625) will recall over 80,000 Kuga sports utility vehicles in the country due to steering problems. Ford and Chonqing will start recalling the vehicles on February 21.

The subsidiary of Volkswagen AG (OTCMKTS:VLKAY) (ETR:VOW) (FRA:VOW) in China recalled 640,309 vehicles last month. The automaker checked using mineral oil instead of synthetic oil would prevent gearbox-related electrical problems. The company also recalled 207,778 Tiguan compact sport-utility vehicles due to partial light malfunctions.

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