Fiat Chrysler Automobiles N.V. (FCAU)  

Fiat Chrysler’s stock bruised after it recalls 1.9 million vehicles


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Kevin Dobbs | FlashRatings | Friday, September 16, 2016 12:47 PM EDT
Shares of Fiat Chrysler Automobiles NV (FCAU) dipped after the company announced it is recalling up to 1.9 million vehicles worldwide that may be vulnerable to seat-belt and air-bag problems tied to three deaths and several injuries.

Analysts did not immediately react with ratings actions, but investors pushed the stock down more than 2.5% in morning trading Sept. 16 to around $6.35.
Of nine analysts covering Fiat Chrysler, 44% are positive on the stock. The median price target is $7.25.

The U.S.-Italian automakers said a faulty computer within certain models made between 2010 and 2014 can fail and prevent air bags and seat belts from working properly. "The company is aware of three fatalities and five injuries that may potentially be related to this condition," Fiat Chrysler said in a statement. The company said it has ceased use of the flawed equipment. Affected vehicles include the Chrysler Sebring, 200, Dodge Caliber, Avenger, Jeep Patriot and Compass.

The Fiat Chrysler recall marks another in a string of such actions, as automakers and their regulators navigate an era of rapidly advancing technology, trying to equip cars and trucks with the latest computer systems while ferreting out rare glitches that can cause fatal problems.
"There is a hypersensitivity now in the industry to vehicle safety," analyst Scott Upham of Valient Market Research said in a CNBC report.

Just last week General Motors announced plans to recall some 4.3 million vehicles worldwide because of a software problem that can thwart air bag deployment. That problem, similar but not identical to the one called out by Fiat Chrysler, has been tied to one death and three injuries.