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 The cars are made locally by Shanghai General Motors Co Ltd, GM's
venture with SAIC Motor Corp <600104.SS>. GM said on Friday the
bracket may crack after long-term use and in extreme cases could
lead to fuel leaks.
The recall, which was announced on Friday by China's General
Administration of Quality Supervision, Inspection and Quarantine,
affects two of GM's most popular models in China, the Buick Excelle
compact car and the Chevrolet Sail subcompact.
More than 1.2 million Excelle made between 2006 and 2011 and more
than 240,000 Sail subcompacts built between 2009 and 2011 are in the
recall.
Separately, Ford Motor Co's <F.N> joint venture with Chongqing
Changan Automobile Co Ltd <000625.SZ> will recall close to 81,000 of
its Kuga crossovers over a steering part, China's quality control
agency said.
The leading U.S. automaker by sales, GM is facing stiffer
competition in China from competitors such as Volkswagen AG <VOWG_p.DE>.
Yale Zhang, head of Shanghai-based consulting firm Automotive
Foresight, said GM was unlikely to sustain a big reputational hit in
China because of the recall.
"GM has warned that the affected component might crack after long
use and lead to fuel leakage, but in real life it doesn't appear to
have happened," Zhang said.
"There are so many recalls these days, and some automakers call back
products proactively more as a precaution," Zhang said. "In this
case, the recall shouldn't affect GM's reputation in China that
much."
Morgan Stanley analyst Adam Jonas estimated that in 2012 GM derived
almost 30 percent of its global net income from its China
affiliates, compared with 6 percent for Ford. The companies do not
break out their earnings in China when they report quarterly and
annual results.
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U.S. carmakers in China have generally outpaced growth in the
overall market, helped by popular models and partly because last
year Japanese carmakers were caught up in anti-Japan protests over a
territorial dispute between Beijing and Tokyo.
GM sold 2.89 million vehicles in China from January through November
2013, up 11.4 percent from a year earlier, while Ford sold 840,975
vehicles, up 51 percent.
Total China vehicle sales rose 13.5 percent January-November 2013 to
19.86 million, with car sales up 15.1 percent to 16.15 million,
according to the China Association of Automobile Manufacturers (CAAM).
Automakers have become more proactive about safety recalls since
Toyota Motor Corp <7203.T> recalled nearly 19 million vehicles
worldwide from late 2009 to early 2011 because of claims of
unintended acceleration.
Last month, Volkswagen's Chinese unit recalled 640,309 vehicles to
check they were using mineral oil rather than synthetic oil to avoid
gearbox-related electronic flaws. That was part of a broader global
recall over a range of issues with several models. It also pulled
207,778 Tiguan compact sport-utility vehicles off the road due to a
risk of a partial light malfunction.
GM makes vehicles in China in partnership with both FAW Group
<000800.SZ> and SAIC. Ford has manufacturing and sales ventures in
China with Changan Automobile and Jiangling Motors Corp <000550.SZ>.
(Reporting by Kazunori Takada;
additional reporting by Norihiko Shirouzu in Beijing and Deepa
Seetharaman in Detroit; editing by Ian Geoghegan, Toni Reinhold)
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