2004 Was Record Year for Auto Recalls; Complexity of Vehicles, More Vigilance Cited As Reasons

DETROIT November 30, 2004; John Porretto writing for the AP reported that automakers can claim the dubious achievement of recalling more vehicles in the United States this year than ever before, though analysts and other observers say the record is more a result of the increasing complexity of cars and trucks and greater vigilance than a lapse in quality.

Led by General Motors Corp., the world's largest automaker, manufacturers have recalled about 25 million vehicles so far in 2004, topping the previous high of 24.6 million in 2000, according to the National Highway Traffic Safety Administration, which oversees recalls for the U.S. government.

GM alone has recalled 10.5 million vehicles in North America -- the vast majority in the United States -- up from 7.8 million in 2003 and 5.7 million in 2002, the company said. Japan's No. 1 automaker, Toyota Motor Corp., said it has recalled roughly 890,000 vehicles in the United States this year, four times as many as in 2003.

Experts offer several reasons for the ballooning numbers: federal guidelines that require companies to report more defect data to the NHTSA; vehicles that rely more heavily on computers and electronics; the growing practice of sharing common parts among a larger number of models and more safeguards at litigation-sensitive automakers to catch flaws earlier.

In some instances it's a Catch-22 for automakers, which are adding more intricate safety features to a broader range of vehicles but at the same time adding to their complexity.

Honda Motor Co.'s American arm, for example, is recalling 257,616 Accord sedans from the 2004 and 2005 model years because the driver's air bag may not deploy properly, the NHTSA said last week.

"New functionality always presents new complexity, and complexity means more ways to fail," said Joe Ivers, executive director of quality at J.D. Power and Associates, which rates vehicles annually in areas such as initial quality and longer-term dependability.

Analysts say the rising number of recalls, most of which are initiated by automakers themselves, and the eye-catching volume of vehicles involved shouldn't be considered an indictment on overall vehicle quality, which has risen in recent years.

The average initial quality of new cars and trucks has climbed significantly in the past year, J.D. Power said in April, and each of Detroit's automakers showed year-over-year improvement. GM fared best among the Big Three, while Toyota, coupled with its Lexus luxury brand, repeated as the company with the highest overall initial quality.

J.D. Power's initial quality surveys measure buyer satisfaction during the first 90 days of ownership.

The company's annual study of longer-term dependability, released in May, showed similar results -- Toyota on top but marked improvement from GM, Ford Motor Co. and DaimlerChrysler AG's Chrysler Group.

"I don't like all these recalls like, `Oh, there's poor quality here,' because quality in general has improved among all automakers," said Mike Wall, an analyst with the forecasting firm CSM Worldwide. "Certainly there are some eyebrow-raising volumes, but at the same time they can be for fairly mundane things. They're important to get taken care of, but it doesn't take very much to trigger one."

One factor not necessarily linked to the recalls themselves but that can contribute to a massive number of vehicles involved is the use of common parts on a variety of models. The practice reduces costs and, ideally, improves overall quality if the parts hold up.

But it can cause problems, too. GM, for example, announced the recall of 4 million 2000-04 pickups worldwide in March because their tailgates could break without warning. The culprit: common cables that hold the trucks' tailgates in place could corrode or fracture.

"They tend to add up very quickly when you're dealing with those kinds of numbers," GM spokesman Alan Adler said.

Don't look for recall tallies to diminish anytime soon, industry officials say, given the record numbers of new models available to consumers and requirements contained in what's known as the federal TREAD Act, enacted in 2000 as a mechanism to spot safety defects earlier.

The Transportation Recall Enhancement, Accountability and Documentation Act, which took effect late last year, was a direct response to the recall of more than 10 million Firestone tires four years ago. The tires, used on Ford Explorers, were recalled because federal safety officials found they were prone to losing their tread, causing rollovers.

The act requires vehicle and equipment manufacturers to submit periodic reports on consumer complaints, warranty claims and other information that could indicate the existence of a potential safety defect.

Marianne Grant, a TREAD Act expert with the consulting firm Syncata Corp., said the new reporting requirements almost certainly help automakers react more quickly to potential flaws -- which can save them tens of millions of dollars.

"There's a greater awareness and even anxiety inside the manufacturers these days," Grant said.

Of the 462 individual recalls identified by the NHTSA for the first nine months of this year, 356 were begun by automakers voluntarily, the other 106 influenced by the NHTSA. Adler said 84 percent of GM's 2003 recalls were voluntary.

"You want customers to be satisfied with what they've got," he said. "If you take care of a recall the right way, and the person is not overly inconvenienced, they're generally happier to have had the vehicle recalled."

National Highway Traffic Safety Administration: www.nhtsa.dot.gov

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