BMW Widens Recall to 489000 Autos on Engine-Bolt Fault – Bloomberg

Posted: Saturday, April 12, 2014

Bayerische Motoren Werke AG (BMW), the
largest maker of luxury cars, is recalling 489,000 vehicles
worldwide due to a possible engine-bolt defect, widening a
repair program that was initiated in China.

No accidents or injuries have been reported related to the
fault in some six-cylinder engines, Bernhard Santer, a spokesman
for the Munich-based manufacturer, said today by phone. Vehicles
affected include 156,000 cars in North America, as well as
232,098 autos in China that were announced for recall within the
past month.

Recalls are increasing worldwide as regulators tighten
scrutiny and carmakers seek to avoid harm to their reputations
after questions about whether flaws are disclosed soon enough.
Toyota Motor Corp. (7203) issued its second-biggest recall announcement
earlier this month. General Motors Co. (GM) said yesterday it
anticipates taking a first-quarter charge of $1.3 billion
primarily for the cost of recall-related repairs.

“What we’re seeing these days is a culture change in the
automotive industry,” said Christoph Stuermer, lead analyst for
PricewaterhouseCoopers’s Autofacts forecasting service. “The
general quality of cars has improved significantly. But
manufacturers are increasingly recalling vehicles as a
precautionary measure.”

5-Series Sedan

BMW fell 0.3 percent to 90.21 euros in Frankfurt trading.
The stock has gained 31 percent over the past 12 months, valuing
the manufacturer at 57.9 billion euros ($80.4 billion).

Most of BMW’s lineup is available with six-cylinder
engines, including cars such as the top-of-the-line 7-Series and
up-market 5-Series sedans and the X3 and X5 sport-utility
vehicles. Santer didn’t provide details on the models being
called in for repairs.

In affected cars, a light may come on advising the driver
to have the engine checked, Santer said. The vehicle can still
be driven to the nearest repair garage with reduced engine
power, he said.

GM is recalling 2.59 million vehicles to fix potentially
faulty ignition switches following incidents that caused cars to
lose power, including accidents linked to at least 13 deaths.
Detroit-based GM is being investigated by U.S. authorities over
questions of why the notice took place years after the flaw was
first detected. The company has suspended two engineers from the
team that worked on the components.

Industry Trend

Toyota, roiled by a crisis over unintended acceleration in
2009 and 2010, earlier this week announced it was recalling 6.39
million cars to fix defects such as cables that could prevent
airbags from deploying and windshield-wiper motors that may
break down and cause brake lamps to stop working. Fiat SpA (F)’s
Chrysler detected a fault in 867,795 Jeep Grand Cherokee and
Dodge Durango SUVs and is installing a shield to protect brake
boosters from water corrosion.

Herbert Diess, the head of BMW’s research and development,
said at a March 19 press conference that the manufacturer’s data
on breakdowns and guarantee services show vehicle quality is at
“a good level.” While the number of recalls has “hardly
changed” in recent years, “the number of affected vehicles per
recall went up.”

Such increases may become an industry trend because of
widening standardization of technology and components used
across a range of vehicles, Chief Executive Officer Norbert Reithofer said at the briefing.

To contact the reporter on this story:
Christoph Rauwald in Frankfurt at
crauwald@bloomberg.net

To contact the editors responsible for this story:
Chad Thomas at
cthomas16@bloomberg.net
Tom Lavell, David Risser

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