Fiat Chrysler To Update Software In 104,000 Diesel Vehicles

Fiat Chrysler Automobiles N.V. (NYSE:FCAU) has planned to update software in 104,000 old diesel vehicles to reduce excess emissions. This step will resolve the concerns of U.S. regulators over emission problems. Per the company sources, the update will not impact vehicle performance or fuel efficiency.

In January, the Environmental Protection Agency (EPA) and California accused the company of illegally using undisclosed software in order to pass the government emissions tests for 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks.

The notice of violation was the result of a probe that happened due to regulators' investigation of rival Volkswagen (DE:VOWG_p) AG’s (OTC:VLKAY) emissions levels. The software update will start once it gets approved by the EPA and California Air Resources Board.

Fiat Chrysler believes the update will help facilitate a prompt resolution of the ongoing discussions with the Environment and Natural Resources Division of the U.S. Department of Justice and other governmental agencies.

A federal hearing is set in California on a series of lawsuits filed by owners of vehicles and some dealers against Fiat Chrysler and the Justice Department.

Price Performance

Fiat Chrysler has outperformed the Zacks categorized Auto Manufacturers-Foreign industry over the last six months. The company’s shares gained 33.9% over this period while the industry witnessed a 6.36% decline.

Zacks Rank & Key Picks

Fiat Chrysler currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A couple of other companies worth considering in the auto space include Allison Transmission Holdings Inc. (NYSE:ALSN) and Cummins Inc. (NYSE:CMI) , both sporting a Zacks Rank #1 (Strong Buy).

Allison Transmission has an expected long-term growth rate of 11 %.

Cummins has an expected long-term growth rate of 11.65%.

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