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Expect Recall Numbers to Remain High, Study Says

NHTSA looks to increase investigation numbers, leading to more actions.

by on Feb.25, 2015

Mark Rosekind, NHTSA's new administrator, is pushing for a tripling of the agency's budget to ensure it can be an "enforcer" of safety rules.

The steady stream of automotive recalls that made 2014 the Year of the Recall is unlikely to occur again this year, but volumes are likely to be higher than normal, according to a recently released study.

Stout, Risius and Ross, a financial advisory firm, released its second annual automotive industry warranty and recall study suggesting that the federal government is getting better at determining when there is a problem and getting automakers to take action, which will mean more recalls than normal this year. The firm discussed its findings at the Society of Automotive Analysts second annual Automotive Warranty and Recall Symposium.

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In short, another year with with 63.9 million vehicles recalled shouldn’t happen nor should a replay of last year’s type of recalls where two large events dominate the recalls. According to the firm, Takata’s faulty airbags accounted for 30% of last year’s recalls and General Motors was good for 20% with its action related to its ignition switches. GM, Toyota, Ford and Chrysler led the year in recalls.

NHTSA collected $126 million in civil penalties, exceeding the total amount collected in the agency’s entire history.

The possibility of another year of big recall numbers shouldn’t be all that surprising as the new head of the National Highway Traffic Safety Agency (NHTSA), Mark Rosekind, has already predicted it would happen.

“I think we could actually see an increase in the number of recalls. The reality is that means your system is working. We’d rather have people on the proactive end catching stuff really early,” he said. “I’d rather have people be preemptive than waiting too long and making a mistake, because you can’t save those lives after they’re gone.”

In short, this year could lead to more recalls, but in smaller numbers. The large multi-million vehicle recalls get the headlines, and actions involving more than 100,000 vehicles accounted for more than 30% of all recalls in 2014, but most involve much smaller numbers: 10,000 or less.

(Honda CEO ousted amidst airbag woes. For more, Click Here.)

If Rosekind gets his way, which means he gets the budget increase he’s looking for so the investigative staff at NHTSA doubles in size, there could be more recalls in 2015, but the total number of vehicles impacted would be smaller.

(Click Here for details about automakers blowing away previous recall record last year.)

Perhaps just as importantly, the study found that automakers are improving at getting the repairs completed on recalled vehicles. In 2014, automakers fixed about 80% of recalled vehicles; however, the firm estimates there is 46 million vehicles on the road with unrepaired recall issues.

(To see more about Takata getting fined $14,000 a day, Click Here.)

In a surprise to no one, the older a vehicle with a recall is, the less likely the problem is to be addressed by the owner. GM dealers offered gift cards and free loaners to lure owners of cars with the faulty ignition switches into dealerships.

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One Response to “Expect Recall Numbers to Remain High, Study Says”

  1. Jorge says:

    What a revelation… Now that auto makers are starting to actually take responsibility for known and potential safety and hopefully other warranty issues, of course the volume will remain high for awhile as they have a couple hundred million vehicles to deal with over the past 10 years.

    I’m still waiting to hear why BMW has not been forced to recall every single x35i model they sold and replace the defective fuel injection system where the high pressure fuel pumps fail without warning and the car shuts off at any speed including at 70+ mph on the highway. BMW has bandaided these cars for over six years but never fixed the safety issue. NHTSA has had this listed on their website for years as a safety defect and yet BMW has never resolved the issue and there are probably a 100,000 or more of these vehicles on U.S. highways.