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General Motors (GM) to Stop Producing Cars without Airbags

General Motors Company GM announced that it will gradually stop the production of vehicles without airbags and other safety features. The automaker took this decision after its Chevrolet Sail subcompact failed a crash test in Latin America.

According to the Latin New Car Assessment Program, an independent testing organization, Chevrolet Sail got zero stars in its latest tests. The tests suggested that the Chevrolet Sail is an unstable vehicle.. The car is devoid of three-point seat belts in all positions and does not feature any airbags.

In order to defend its prior policy of selling vehicles without airbags, General Motors had put forward that such cars are cheaper and therefore, affordable for low income buyers. Chevrolet Sail, which starts at less than $10,000, is produced in China and exported to emerging markets. General Motors also has other vehicles under the Chevrolet brand, including the Aveo, Spark and Agile, which were given zero stars in the Latin New Car Assessment Program.

Apart from General Motors, other automakers too sell vehicles that have received zero stars in the crash test in Latin America. However, according to the secretary general of the Latin New Car Assessment Program, General Motors should follow in the footsteps of automakers like Honda Motor Co., Ltd. HMC, Toyota Motor Corporation TM and Volkswagen AG VLKAY, which sell vehicles that satisfy at least the minimal safety standards.

General Motors hopes to enhance global road safety with the incorporation of basic auto safety standards in markets worldwide. The automaker confirmed that it will be investing $5 billion for the development of safer cars for the emerging markets. The automaker also said that these vehicles will feature airbags as well as the three-point seat belts in all positions. Vehicles of model year 2019 will have all these features.

General Motors currently carries a Zacks Rank #3 (Hold).

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