India’s largest carmaker Maruti Suzuki India Ltd has announced to recall of 9,925 units of passenger vehicles Wagon R, Celerio and Ignis manufactured between August 3, 2022, and September 1, 2022.
The reason behind the recall is believed to be a possible defect in the rear brake assembly pin. The company has said inspection and replacement of the faulty part will be done for free. "It is suspected that there is a possible defect in the rear brake assembly pin (‘Part’), which in a certain case, may break and cause a peculiar noise. There may be a possibility of an impact on brake performance in the long run. Considering the safety of customers and out of abundant precaution, the company has decided to recall the suspected vehicles for inspection and replacement of the faulty part, free of cost," a Maruti statement said.
Maruti said it is arranging parts for replacement, and Maruti Suzuki-authorised workshops will contact the customers concerned about attending their vehicles. "Necessary repair, if required, will be undertaken post-inspection."
Before this, the auto giant had recalled 1.8 lakh units of Ciaz sedan, Ertiga, Vitara Brezza, SCross and XL6 in September 2021 to replace faulty motor generator units. Notably, the Centre has now made it mandatory for companies to recall vehicles if they notice any defects, which may be generic. If they fail to do so, there are provisions for penalties.
Maruti last week announced that its standalone net profit in the July-September quarter jumped more than fourfold or 334% YoY to ₹2,061.5 crore as compared with ₹475.3 crore in the corresponding period last year. Revenue grew around 46% year-on-year to ₹29,931 crore for the said quarter.
In total, Maruti Suzuki sold 517,395 vehicles in Q2 -- the highest ever in any quarter. In the domestic market, Maruti sold 454,200 units and exported 63,195 units. "Shortage of electronic components impacted production by about 35,000 vehicles in this quarter," the carmaker says.
In Q2 FY23, the pending customer orders stood at 412,000 vehicles, of which 1,30,000 vehicle pre-bookings are for recently launched models.
The Maruti Suzuki stock is trading 2.15% up at ₹9,699.45 today. The company, which announced blockbuster Q2 financial earnings on Friday, saw its shares surging 10.47% or ₹918 in the past week alone. It has risen 9.82% in the past month and 26.81% in the past six months. In the year-to-date period, the share has jumped 28.86%.
On the back of quarterly solid earnings, brokerages are bullish on the auto stock. While Jefferies has given a buy call on the stock, while raising the target price to ₹12,000 per share, Citi analysts have raised the target price to ₹12,500. Kotak Institutional Equities and CLSA, however, have given a sell call on the stock expecting slow growth in the PV sector.
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