South Korean auto giant Kia America (KIMTF) is recalling thousands of vehicles in the U.S. because of potential fire hazards.
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Dangerous Risks
According to the U.S. National Highway Traffic Safety Administration (NHTSA), Kia America is recalling over 35,000 vehicles because the heating, ventilation and air conditioning (HVAC) blower motor wiring harness may be inadequate causing fire risks.
This is clearly potentially dangerous and deadly to drivers.
It is the latest in a number of recalls which have hit the company, whose parent firm is Hyundai (HYMLF), so far this year. Back in August, the NHTSA said it had opened an audit into 137,256 Kia America vehicles to assess the effectiveness of the automaker’s remedy for defective piston oil rings in some Seltos and Soul models.
In February, Kia America launched a recall of the said Seltos and Soul vehicles, model year 2021-2023, over concerns that piston oil rings may have been manufactured incorrectly, which can result in engine damage causing a loss of motive power or an increased fire risk.
Earlier in August, Kia America recalled about 201,149 Telluride vehicles in the U.S. as the door belt molding trim could delaminate and detach from the vehicle.
Kia Aims
Kia aims to increase its U.S. sales by 7% to 8% in the second half of the year even as overall auto sales in the U.S. market are expected to slump by 10%, leading to a gain in market share to over 6% from 5.1% in the first half. As seen below, its revenue performance has been relatively stable in the last few months.
It expects its new hybrid sport utility vehicle Carnival and K4 small car sales to drive the gains while some Japanese automakers are raising prices.
Goldman Sachs (GS) has got behind the wheel recently initiating coverage of Kia with a Buy rating. Despite “all the worry” in their share prices, the firm said it saw signals that Hyundai Motor and Kia can increase their U.S. market share to 13.7% by 2028 from 11.5% in 2025.
However, if there is one thing which will put a dampener on driver demand it is recalls. They can badly affect an automaker’s reputation and are why legal and regulatory are such key risks for both the company and investors to consider.
Is KIMTF a Good Stock to Buy Now?
Given the lack of analysts covering KIMTF, let’s take a look at the stock’s technical analysis.
