Nissan calls back its cars. Will it affect stock markets?

Market Leader informed

Nissan has announced a recall of more than 2 million cars with flawed engine system. Micra, Note, Tiida and Titan models will be accepted at Nissan service centers for eliminating the problem.

Those cars that need repairing were made in the USA, Japan, Great Britain, China, Spain and Taiwan. The greatest amount of the cars will be called back in Japan (835.000), Europe (354.000), the US and Canada (762.000). In order to eliminate the defects the owners just need to drive to the nearest service center and spend 25 min waiting for the car to be repaired. And it’s absolutely free.

Nissan is Japan’s 2nd largest automaker. Every year it sells over 4 million cars in 50 countries of the world. The net revenue is more than $100B. Previously there were other mass recalls in the history of Nissan, which speaks in favor of the company’s care about its numerous clients and not about the low quality of its products.

It should be reminded that in March Nissan called back 540.000 cars in Canada, USA, Middle East states and Russia for eliminating the brake and fuel-gauge problems. Among the affected models were the following:
* Infiniti QX56
* Nissan Titan
* Nissan Quest (2008-2009 model years)
* Nissan Armada (2008-2010 model years)

Besides, among the models affected by the fuel gauge problem were Infiniti QX56, Nissan Titan, Nissan Frontier, Armada, Pathfinder and Xterra (2005-2008 model years).

What should the investors do about it? What will be the company’s stock reaction to the recall of the autos? Analysts from the Department of Market Trading of Masterforex-V Academy note that the company’s shares have been showing uptrend for almost 2 years. By now the uptrend has been resumed after a small-scale retracement and the price has overcome a strong resistance level. If the price fails to settle above the level, taking into account that the stock market indicates a market-wide flattish tendency, one can expect NSANY to retrace down to $17-17.5. The price area may be suitable for looking for purchases on condition that the market-wide flat is over. If the retracement is deeper, then $16 is likely to be the level to look for buys.

Note:
Nissan Motor Co. LTD is one of the leaders in the global automobile industry and Japan’s leading automaker. The first vehicle called “Datsun” was marketed in 1935. Now the company’s automobile plants are situated in 16 countries around the world, employing 180.000 people and producing a range of 60 models. Nissan exports its cars to 190 countries. The company’s current CEO is Carlos Ghosn. Nissan owns 11 research centers and 7 design studios around the world, trying to meet every customer’s demands. The company’s research institutes develop brand new technologies in order to make Nissan cars competitive and providing extra value for their owners. On a larger scale, Nissan is constantly improving their models in order to reduce the harmful impact on the environment. Moreover, the company pays much attention to social programs aimed at improving the community’s welfare, without which it is very difficult to lead a successful business.

 

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