As I write this on Memorial Day 2014, automotive recalls are captivating the auto industry, led by General Motors. It seems like they are making recall announcements every day or two. The tally right now in just the United States is a little over 14 million GM vehicles have been recalled, and it is only May.
It is hard to know what the strategy is. It would be hard to blame GM for being overly cautious right now, a 35 million dollar fine will do that to a car company. While that is a lot of money, the bad publicity can take an even bigger toll. I also wonder if they are just trying to get them all out in the open at one time so they can move forward.
As I said on my radio show a week or so ago, there is no correlation between recalls and long-term vehicle reliability. Some of the best car companies out there have had a ton of recalls. Toyota is a great example. They build some great cars, but recalled more cars in 2013 and 2014 than any other manufacturer. Other vehicles with poor quality reputations have had virtually no recalls.
America has a short memory, and suffers from what I call Recall Apathy. We’ve grown used to recalls, from food, to child seats, to cars. Even when the recalls involve items that are potentially deadly, we have no urgency in getting the repairs made. I have had listeners say to me “I’ll just wait until there is another recall and get them all done at once”.
For your dealer, recalls are a mixed bag. They hate the hit their reputations take when there is a recall, and no dealer wants to inconvenience a customer. However, dealers make a ton of money fixing recalls. Often it turns into an opportunity to do other services while the car is in the shop, and sometimes it even leads to people trading their cars in on a newer model.
Between the large amount of recalls between GM and Toyota, it is pretty clear the landscape going forward has changed forever. Greater transparency is going to be a way of life, and let’s face it, the numbers of recalls in the near future will increase. We are on track to set a new automotive recall record in 2014. Car companies will be forced to change the way they handle recalls going forward.
Toyota admits that one of the reasons they are moving from Los Angeles to Dallas is so they can react faster to issues by being closer to their manufacturing facilities. It makes good sense and it is clear Toyota is focused on doing better when it comes to problems that arise.
The root issue with recalls is not in the manufacturing process of the cars, it is with the parts suppliers that provide components. The car companies have only themselves to blame for this. They continually squeeze suppliers to cut costs, sometimes to the point that they go out of business. However, in most cases, the suppliers find a way to make a cheaper part, and as you might imagine, this has a profound effect on quality. Many of the automakers use the same suppliers, so when a part goes bad, it could affect multiple vehicle brands.
The reality is, much has to change going forward, and if there is a bright side to all these recalls, it may force the changes that will keep everyone safer and drivers can lead a more hassle-free life.
-Jerry Reynolds, The Car Pro