Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Ford Motor Company (F), Honda Motor Co Ltd (ADR) (HMC), Toyota Motor Corporation (ADR) (TM): Vehicle Quality: Detroit Beating the Japanese?

As a Ford Motor Company (NYSE:F) shareholder it’s frustrating to see the recent onslaught of vehicle recalls. Problems have included anything from child safety locks, rusting, and even fire risks. Unfortunately the fire risk was associated with an EcoBoost engine used in two popular vehicles, the Escape and the Fusion. It isn’t just Ford Motor Company (NYSE:F), though; other manufacturers are having an even worse time recently with recalls. In fact, if you were to guess which two automakers had the most recalls in 2012, which would it be? If you guessed Toyota Motor Corporation (NYSE:TM) and Honda Motor Co Ltd (ADR) (NYSE:HMC) – two carmakers previously known for high quality – you would be correct. Let’s look at these companies and see if their recalls will affect sales or investors.

Ford Motor Company (NYSE:F)Just the facts
Toyota Motor Corporation (NYSE:TM) recalled 5.3 million vehicles in 2012 taking the dubious honors at the top spot for most recalls. Japanese rival Honda Motor Co Ltd (ADR) (NYSE:HMC) tried to keep it close by tallying 3.3 million vehicle recalls. GM took home the bronze with 1.4 million recalls, while Ford chalked up 1.3 million. Other than last year, when is the last time you could combine GM and Ford’s recalls and equal less than Honda or Toyota Motor Corporation (NYSE:TM)?

Escape and Fusion
These two models were recently redesigned and have been selling like hotcakes. February was another solid month, and Ford Motor Company (NYSE:F)’s first quarter is shaping up to be a great one for its revenue. The Fusion had a record February with a 28% gain over last year. The Escape had two record months in a row, with February topping last year’s mark by 29%. Let’s look at the recent onslaught of recalls. If these persist, or gain the attention of the consumer too often, it could dampen such great sales increases.

Last year Ford Motor Company (NYSE:F) had to recall 7,600 new Escapes because of a coolant leak that was causing engines to overheat and possibly catch fire. The problem was due to an engine plug being installed incorrectly on some engines, then falling out and causing the leak. Ford also had to recall 11,500 Escapes to fix fuel lines that had the potential to crack and leak. Here’s the one that really made me shake my head: 10,000 vehicles were recalled to fix carpet padding that could interfere with the user’s braking ability.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.