From September 2013, the broken bearings issue of Chang'an Ford Escape was often seen on the media. The manufacturer recently announced that Escape would be recalled due to disqualified material causing the broken issue. An expert in auto industry said it was convincing that blaming the issue on supplier but manufacturer should also check the structure and technology. An analyst from Huatai Securities said the recall would eliminate the impact on share price of Chang'an gradually and the cost would be transferred to supplier so there would be little effect on the performance of Chang'an.
In 27th December, Chang'an Ford decided to recall total 80,857 cars which were manufactured between 21st September 2012 and 13rd November 2013. This decision will come into effect from 21st February 2014. Chang'an Ford will replace the knuckle free of charge for those recalled cars. The knuckle is an important part of steering axle, whose function is to bear the load of the front so it requires being high strength. An expert in auto industry told reporter this issue was caused not only by disqualified material but also the structure and technology.
The expert also said Chang'an Ford would transfer the recall cost to the components supplier. The analyst from Huatai Securities predicted the cost wouldn't be over 1,000 RMB and cause little impact on the performance. There has been some effects on share price of Chang'an but recalling will eliminate it gradually.
