Volkswagen Recalls 385,000 Cars In Germany To Renew Software

Volkswagen (DE:VOWG_p) AG (OTC:VLKAY) has recalled 385,000 cars in Germany according to The Wall Street Journal. The recalled brands include Volkswagen’s own, along with Audi and Skoda. The total cost to update the software is estimated to be $1.7-$2.8 billion.

Per news, these vehicles in certain driving conditions, such as over-steers, under-steers or slams on the brakes, might function improperly due to defective brake control system. In the recalled vehicles, software will be updated for their anti-lock brake systems. This recall comes soon after the German Transport Ministry pushes for updating engine control software in 12 million diesel vehicles across the country in order to cut down on nitrogen oxide pollution by 25%. The government wants automakers to bear the updating cost of emission systems in diesel-based cars.

Based in Wolfsburg, Germany, Volkswagen is the largest automobile manufacturer in Europe. They design, manufacture and distribute products and services along the entire automotive value chain. While each brand has a distinct personality, it also benefits from its membership of the Volkswagen Group with a global manufacturing base.

Price Performance

Volkswagen shares have outperformed the Zacks categorized Automotive-Foreign industry in the last three months. The company’s shares rose 5% compared with the industry’s decline of 2.7%.

Zacks Rank & Key Picks

Volkswagen currently carries a Zacks Rank #2 (Buy).

Volkswagen AG Price and Consensus

Volkswagen AG Price and Consensus | Volkswagen AG Quote

A few other top-ranked companies in the same space are Cummins Inc. (NYSE:CMI) , Ferrari N.V. (NYSE:RACE) and Dana Incorporated (NYSE:DAN) . Cummins and Ferrari sport a Zacks Rank #1 (Strong Buy), whereas Dana carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cummins has an expected long-term growth rate of 11.7%

Ferrari has an expected long-term growth rate of 14.1%

Dana has an expected long-term growth rate of 3%.

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