GM Cars Win Superior Rating from IIHS - Analyst Blog

Share price of General Motors Co. GM increased 0.8% to $34.58 on Jun 2, after the automaker received superior ratings on 4 cars from the Insurance Institute for Highway Safety (IIHS) in a front crash prevention test. The vehicles that received this rating are Buick Regal, Cadillac CTS, Cadillac XTS and Chevrolet Impala equipped with General Motors' Front Automatic Braking system. The version of these cars without the autobrake system received only a basic rating.

According to the institute, all these vehicles with the Front Automatic Braking system provide industry-leading safety. In addition, the institute appreciates the automaker's initiative of not restricting this safety technology only to luxury Cadillac products, as this technology also features in more mainstream brands like Chevrolet and Buick.

The Front Automatic Braking applies the brakes when it detects the probability of a crash. This technology can apply hard braking to aid the driver in avoiding a crash and also to lessen its adverse effects, if it takes place.

Previously, IIHS had also assigned the highest safety rating to General Motors' vehicles for front end safety. The automaker's 2014 Chevrolet Equinox, GMC Terrain and Chevrolet Malibu, featuring the feature the forward collision alert system, received the 2014 Top Safety Pick + rating from the institute.

This Forward Collision Alert system is powered with crash-avoidance technologies. It alerts the driver when it comes close to another vehicle through visual or audible signals.

The Cadillac XTS and CTS also have the Safety Alert Seat system, which provides a vibrating pulse on both sides of the seat when it detects a frontal threat.

Toyota Motor Corp.'s TM 2014 Corolla could just manage a “Marginal” rating from IIHS in a front crash test. This rating is based on the vehicle's structural performance, which was not good and the space for the driver was highly compromised. IIHS also conferred the “Acceptable” rating on Ford Motor Co.'s F 2014 Ford Focus 4-door sedan in the small overlap front test.

General Motors currently holds a Zacks Rank #3 (Hold). Fox Factory Holding Corp. FOXF, carrying a Zacks Rank #1 (Strong Buy), is a better-ranked automobile stock worth considering.

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