SHANGHAI Dec 27 General Motors Co's
China joint venture is recalling 1.46 million cars due to a
defect with the fuel pump brackets, in one of the largest safety
recalls in the world's biggest auto market.
The cars are made locally by Shanghai General Motors Co Ltd,
GM's venture with SAIC Motor Corp. GM said on Friday
the bracket may crack after long-term use and in extreme cases
could lead to fuel leaks.
The recall, which was announced on Friday by China's General
Administration of Quality Supervision, Inspection and
Quarantine, affects two of GM's most popular models in China,
the Buick Excelle compact car and the Chevrolet Sail subcompact.
More than 1.2 million Excelle made between 2006 and 2011 and
more than 240,000 Sail subcompacts built between 2009 and 2011
are in the recall.
Separately, Ford Motor Co's joint venture with
Chongqing Changan Automobile Co Ltd will recall
close to 81,000 of its Kuga crossovers over a steering part,
China's quality control agency said.
The leading U.S. automaker by sales, GM is facing stiffer
competition in China from competitors such as Volkswagen AG
Yale Zhang, head of Shanghai-based consulting firm
Automotive Foresight, said GM was unlikely to sustain a big
reputational hit in China because of the recall.
"GM 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," Zhang said.
"There are so many recalls these days, and some automakers
call back products proactively more as a precaution," Zhang
said. "In this case, the recall shouldn't affect GM's reputation
in China that much."
Morgan Stanley analyst Adam Jonas estimated that in 2012 GM
derived almost 30 percent of its global net income from its
China affiliates, compared with 6 percent for Ford. The
companies do not break out their earnings in China when they
report quarterly and annual results.
U.S. carmakers in China have generally outpaced growth in
the overall market, helped by popular models and partly because
last year Japanese carmakers were caught up in anti-Japan
protests over a territorial dispute between Beijing and Tokyo.
GM sold 2.89 million vehicles in China from January through
November 2013, up 11.4 percent from a year earlier, while Ford
sold 840,975 vehicles, up 51 percent.
Total China vehicle sales rose 13.5 percent January-November
2013 to 19.86 million, with car sales up 15.1 percent to 16.15
million, according to the China Association of Automobile
Automakers have become more proactive about safety recalls
since Toyota Motor Corp recalled nearly 19 million
vehicles worldwide from late 2009 to early 2011 because of
claims of unintended acceleration.
Last month, Volkswagen's Chinese unit recalled 640,309
vehicles to check they were using mineral oil rather than
synthetic oil to avoid gearbox-related electronic flaws. That
was part of a broader global recall over a range of issues with
several models. It also pulled 207,778 Tiguan compact
sport-utility vehicles off the road due to a risk of a partial
GM makes vehicles in China in partnership with both FAW
Group and SAIC. Ford has manufacturing and sales
ventures in China with Changan Automobile and Jiangling Motors