The U.S. National Highway Traffic Safety Administration (NHTSA) said on December 14 that it is investigating a 2016 recall and fuel leakage issues in German carmaker Volkswagen’s (DE:VOW) VW and Audi family of cars. As per a Reuters report, the probe will inspect 447,497 autos of the Volkswagen Golf and Audi A3 models for the alleged issues.
The U.S. Office of Defects Investigation, a unit of the NHTSA, is investigating the autos to evaluate whether a previous recall and remedial actions issued by Volkswagen in 2016 are effective or not. Furthermore, the regulator will check for potential safety concerns regarding the leakage.
The American auto safety regulator has received about 79 complaints related to the said vehicles. VW Golf and Audi A3 vehicles manufactured between 2015 and 2020 are being probed for chances of fuel leakage near the fuel tank filler door and rear right wheel well. During the 2016 recall, 110,000 VW Golf and A3 autos were probed for the suction jet pump inside the fuel tank, which was the probable cause of the leakage. Following the recall, in 2022, VW issued warranty extensions for the pump to resolve the issue.
Should I Buy VW Shares?
Recently, Exane BNP Paribas analyst Dorothee Cresswell upgraded VOW stock to a Hold from Sell. Cresswell maintained the price target at €138 (10.3% upside potential).
Analysts are cautiously optimistic about Volkswagen shares as the company struggles to maintain margins and amp up sales amid sluggish demand for its autos. On TipRanks, VOW stock has a Moderate Buy consensus rating based on seven Buys versus four Hold ratings. The Volkswagen share price forecast of €140.40 implies 12.2% upside potential from current levels. Meanwhile, VOW shares have lost nearly 14% so far this year.
