Geely's (GELYY) Volvo Recalls More Than 460K Cars Over Faulty Airbag
Geely (GELYY)-owned Volvo recalls 460,769 vehicles involving the S80 sedan from the 2001 to 2006 model years, and the S60 sedan from the 2001 to 2009 model years.
Geely Automobile Holdings GELYY-owned Volvo Cars recently issued a recall for 460,769 older model cars worldwide over defective driver-side air bags.
According to the National Highway Traffic Safety Association (NHTSA), the recall includes 259,383 vehicles sold in the United States, 7,048 in Canada and 2,475 in Mexico. The recalled vehicles are the S80 sedan from the 2001 to 2006 model years, and the S60 sedan from the 2001 to 2009 model years.
Per Volvo, the problem occurs when the driver-side airbag is deployed in the event of a crash. The inflator inside the airbag might explode during the activation, increasing the threat of sharp metal fragments shooting out and in worst cases, hitting the driver or other vehicle occupants, potentially causing serious injury or death.
The air bag inflator propellant tablets can decay over time after being exposed to long-term exposure to extreme inflator temperatures and increased moisture levels. This could lead to the formation of dust particles, and cause the inflator to rupture and spray metal fragments at occupants.
Volvo is aware of one rupture incident that resulted in death due to the defect.
The inflators used in the Volvo vehicles have been supplied by German auto supplier ZF Friedrichshafen, while Autoliv ALV is the airbag assembly manufacturer.
To resolve the issue, Volvo will replace the driver air bag free of cost. It plans to intimate the impacted customers as soon as the next month to repair the vehicles. Volvo declined to comment on the estimated cost to be incurred by the company for replacing the air bags.
The latest recall involves defects which are parallel to the issues affecting the Takata air bag inflators that resulted in a massive recall of 67 million air bags, being the most complex and far-reaching auto-safety crisis till date.
Volvo recently announced that it plans to raise at least 25 billion kronor ($2.9 billion) in Sweden’s biggest initial public offering in decades, and expects to debut on the Nasdaq Stockholm before the end of this year. The company confirmed that the first day of trading was expected to be in 2021 and that Geely would remain its biggest shareholder.
Geely, peers of which include Toyota TM and Honda HMC, currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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