picks up a big tab to recall over 400,000 vehicles globally to repair an incorrect engine part that can cause stalling.
The recall affects its popular Forester Sport Utility Vehicle and Impreza Compact, as well as the BRZ sports car. It also affects the Subaru-made Toyota 86 sports car, sold in the United States as Scion FR-S during the recalled period. All cars were made in 2012 and 2013.
Last week, Subaru lowered the expectations for April-September, the first half of the Japanese fiscal year. The company now expects operating profit of $ 61 billion ($ 540 million), a decrease of 49 billion from its previous forecast, primarily to cover recall costs. The company said it would describe the effects of the repercussions for the full year when it announced the results for the second quarter of Monday.
Subaru said that valve springs in the recalled cars could break and cause the engine to stop, risking an accident. These springs keep the engine valves closed when the fuel burns. Failure can cause serious engine damage.
The repairs are likely costly. Subaru believes that work takes more than 1
Toyota said its vehicle accounts for about 80,000 of the total. In the United States, Toyota recalls approximately 25,000 Scion FR-S models manufactured between March 2012 and July 2013. The company said it would contact affected U.S. owners by mail from December.
The recalled Subaru cars were made between January 2012 and September 2013. Subaru said that 101,000 of the recalled cars were sold in Japan. A company’s spokesman refused to say how many were recalled in the US, Subaru sold nearly 270,000 of the three hit models in the United States during the recalled period.
Last week’s earnings information, which was made after the markets closed in Japan, caught investors by surprise. The next day, the Subaru stock price fell almost 7%.
On the day of the announcement, Tokyo-based auto analyst Takaki Nakanishi Subaru criticized the lack of detail and said in a client’s note that it “poses questions about the quality of its investor relations.” At that time, he wrote that he expected a revocation of between 1 million and 2 million vehicles, a number of echoed in some Japanese press reports.
A Subaru spokesman said that it could not provide more details in its initial disclosure because it had not yet done the mandatory tasks with regulatory authorities.
Write to Sean McLain at [email protected]