Chery recalls 53,882 Omoda and Tiggo 5x cars in China over rear axle defect

Chery Auto (HKEX: 9973) will recall 53,882 Omoda series and Tiggo 5x vehicles in China over a rear axle welding defect that could cause a wheel to lose control in extreme cases. The action starts November 27 and covers vehicles produced between June 6, 2022 and December 31, 2023, according to an announcement published Friday by China's State Administration for Market Regulation (SAMR).

The defect sits in the manufacturing process of the rear axle. The trailing arm and sleeve (the components linking the axle to the body and controlling wheel movement) on some affected vehicles may carry poor welds. In extreme cases, the weld seam could fail and detach, causing a loss of wheel control and raising the risk of an accident, the regulator said.

Chery will inspect the production date codes on the rear axles of recalled vehicles free of charge and replace the axles of any units belonging to the defective batch at no cost to owners.

What triggered the China recall?

The domestic action follows a similar failure overseas. On October 6, the rear axle of a 2023 Omoda 5 detached while the car was driving in Malaysia. Local regulators responded by suspending the model's certification and new vehicle registration, and Chery recalled 8,878 Omoda 5 SUVs in that market.

In an October 11 statement, Chery said welding areas on the rear axle trailing arm of that batch might have insufficient strength. The company then launched a special risk inspection for Omoda 5 cars of the same batch in China and related markets.

This was the second rear-axle recall for the model in Malaysia. In April 2024, Chery recalled 600 vehicles there for inspection after a similar axle detachment incident. The investigation at the time attributed the problem to improper calibration of rear axle welding equipment.

What does this change for Chery's export-driven model?

The Omoda 5 launched in China in 2022 but never gained traction at home. Monthly domestic sales stayed below 1,000 units from 2023 onward, and the model was discontinued in China, surviving mainly as an export product.

That makes quality issues on the nameplate a direct hit to Chery's growth engine. In the first 10 months of this year, Chery Group sold 2,502,723 vehicles cumulatively, up 9.34% year-on-year, according to data compiled by CnEVPost. Exports accounted for 1,751,766 of those vehicles, up 64.8% year-on-year and roughly 70% of total sales over the period.

A welding defect traced to production equipment calibration, recurring across two markets and 19 months of output, puts scrutiny on process control at the plants building these axles. Free replacement of entire rear axles across nearly 54,000 units also carries a cost the company has not quantified.

What to watch next: how quickly Chery completes the November 27 recall inspections, whether additional markets file recalls for same-batch Omoda 5 vehicles, and whether Malaysian regulators restore the model's certification and registration eligibility.