Are car makers fully transparent?

It’s not yet half a year gone into 2014, and yet vehicle recalls issued by the global car manufacturing industry has surged to become perhaps one of the highest in its history. Is this alarming? Yes and no.

The recently announced recall by Toyota of 27 models, some made as early as 2004, involving an estimated 6.4 million units sold throughout the world, at first glance, shows a proactive stance by the Japanese car manufacturer.

In fact, there have been some extreme comments about Toyota taking this recall business a bit too far – especially since the car manufacturer has been diligent in adding to many of its recall notices that no accidents, injuries or fatalities have to date been reported.

Voluntary recall

Take for instance the advice by Toyota to conduct a voluntary safety recall of approximately 10,500 units of the 2013 Lexus GS 350 sedan because of a possibly defective brake pedal load sensing switch.

According to Toyota, there is a possibility that the switch could improperly cause the brake system to activate without driver input while driving and without activating the rear brake lights, and which could result in unexpected moderate deceleration.

Thus, for all involved vehicles, Lexus dealers had hitherto been advised to replace the brake pedal support assembly of the Lexus sedan involved. That’s kind of neat, right?

Forced recall

Ah, but not all of these recalls can be considered “noble.” Remember the celebrated case involving General Motors in the US that involved actual deaths when the ignition key moved out of the “run” position because of variety of reasons, including a heavy key ring, or accidental contact to the key or steering wheel.

Aside from the fines that the US government is mandated to slap GM for its negligence, there should be billions of dollars that may have to be budgeted to settle any such ignition-related accidents.

While the vehicle in question, the Cobalt, had been taken off the production line in 2010, not all affected units since the first model rolled off the assembly line in 2005 had their ignition switches replaced or adequately replaced – hence the reported accidents.

The cost of a forced recall, aside from paying damages to the affected parties and footing huge legal fees, is the tarnished brand image that is reflected financially in a drop in share value as well as decreased sales.

This is, of course, bad timing for GM which is just trying to rise from a financial bailout resulting from the downturn in the US economy a few years back.

Cost of recalls

Even Toyota has not been spared from this growing concern for open transparency and responsibility for defective vehicles parts. Aside from its two voluntary recalls this year, there was a big one in 2009-2010 involving sticky accelerators, and in 2012 concerning power windows that posed a fire risk.

Undoubtedly, the business of manufacturing cars has become a far riskier proposition. And to avoid defaming their expensive public images, many companies have opted to announce recalls rather than be caught with their pants down at some point in the future.

Yes, it may cost these companies millions of dollars today, but save them more money long term when you consider lost sales, exposure to liability and criminal lawsuits, and depreciated stock prices. So expect more announcements in the immediate future.

2013 recalls in US market

It would be prudent to reprint the results of a research featured by Yahoo on the vehicles recalled in 2013, although unfortunately, affecting only the US market. This is understandable with the strong TREAD Act in that country which requires car firms to identify potential problems and immediately notify the US National Highway Traffic Safety Administration.

Here’s the list which appeared in the research featured by Yahoo, starting with the company with the most number of affected vehicles:

1. Chrysler, 2.7 million vehicles: 1993-2004 Jeep Grand Cherokees and 2002-07 Liberty models due to a potential fuel-system problem that could cause fires in a rear-end crash.

2. Hyundai, more than 1 million vehicles: 2007-09 Accent and Tucson, 2007-10 Elantra, 2007-11 Santa Fe, 2008-09 Veracruz, 2010-11 Genesis Coupe and 2011 Sonata models as part of the same brake-light problem also affecting sister company Kia (No. 6).

3. Toyota, 752,000 vehicles: 2003-04 versions of the Corolla sedan and Matrix hatchback due to a faulty airbag control module.

4. Honda, 748,000 vehicles: 2009-13 Pilot SUVs and 2011-13 Odyssey minivans due to a potential problem with the driver-side airbag that could cause improper deployment.

5. Subaru, 633,842 vehicles: 2009-12 Forester, 2010-11 Legacy, 2010-11 Outback and 2006-12 Tribeca models to fix potential faulty lamp wiring that could cause a short circuit.

6. Kia, 623,658 vehicles: 2007-10 Rondo and Sportage, 2007-11 Sorento, 2007 Sedona, 2010-11 Soul and 2011 Optima models due to malfunctioning brake lights.

7. Honda, 561,000 Honda vehicles: 2001-03 Civic sedans, 2002-03 CR-V compact crossovers and 2002 Odyssey minivans, also due to potentially faulty airbags.

8. Toyota, 510,000 vehicles: Toyota Corolla, Matrix, Sequoia, Tundra and Lexus SC 430 models manufactured between 2001 and 2003 (model year not specified in report) due to potentially faulty airbags.

9. BMW, 500,545 vehicles: 2008-12 1 Series coupes and convertibles, 2007-11 3 Series sedans, coupes, convertibles and wagons, and 2009-11 Z4 roadsters due to a potential electrical-system problem that could cause stalling.

10. Chrysler, 442,000 vehicles: 2011-13 Chrysler Sebring, Chrysler 200 and Dodge Avenger sedans, as well as 2011-13 Jeep Liberty and 2011-12 Dodge Nitro SUVs, due to a potential problem with the active head restraint function.

While car owners in the Philippines are waiting for tougher laws from our own government especially with this growing list of recalls, at least let’s be aware and be forewarned.

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