Auto recalls hit record level in U.S.
With a massive recall involving air bags Monday, the auto industry has broken the U.S. annual record for safety recalls in less than half a year.
The problematic part, made by Takata Corp., is used in millions of vehicles made by half a dozen automakers, underscoring how the growing use of common parts is amplifying some safety problems. To cut costs, automakers are designing different models to share platforms and many parts — meaning a single defect can affect millions more vehicles than in the past.
Just two defective parts — the Takata air bag inflator, and the faulty ignition switch behind GM’s ongoing safety scandal — are responsible for 17% of the 31.4 million vehicles recalled so far this year. That breaks the previous record of 30.8 million vehicles recalled in all of 2004.
Automakers reap huge cost savings from parts sharing, but the risk is that “you are putting all your eggs in one basket when things go wrong,” said Greg Schroeder, a senior research engineer at the Center for Automotive Research in Ann Arbor, Mich.
The other key factor in the rush of recalls is fear of reprisals. With GM facing billions in fines and repairs for delayed action on safety issues — and Toyota having already paid billions — the industry has developed a hair-trigger recall sensibility. GM has appointed an internal safety czar with a staff of 35 investigators and now issues large recalls more frequently.
The National Highway Transportation Safety Administration has come under fire as well, for lax oversight, and so has an incentive to crack down on automakers.
The wave of recalls and investigations has created an impression of corporate incompetence and disregard for safety. But the increasing pressure on safety, externally and internally, will pay off for consumers, as will the shift toward global parts sharing, industry experts said.
“Even though people are hearing a lot about recalls, vehicles have never been safer,” said Russ Rader, spokesman for the Insurance Institute for Highway Safety. “People are walking away from crashes today that would have killed them 10 or 15 years ago, and technology like electronic stability control is preventing a lot of serious crashes from happening altogether.”
Automakers are paying better attention to design, conducting more testing and taking advantage of larger scale manufacturing to pack more features into vehicles, said Xavier Mosquet, a senior partner and automotive expert at Boston Consulting Group.
Automakers are spending billions of dollars on the recalls. GM has set aside $2 billion in recall expenses so far this year, and the total is expected to rise. Toyota had to pay a $1.2-billion fine this year for misleading consumers and regulators about its sudden acceleration recalls.
But the burden is likely to fall on the companies and shareholders rather than consumers. Raising car prices isn’t an option for GM, which has recalled nearly 18 million vehicles this year. Its Chevrolet Malibu still has to match up against Nissan’s Altima and Hyundai’s Sonata and other family sedans sold by companies with far fewer recalls this year.
The air bag inflators, made by Takata Corp., are used in millions of vehicles made by Honda, Toyota, Nissan, Ford, Chrysler, Mazda and BMW. The National Highway Traffic Safety Administration said a canister in the system can explode, spraying metal shards throughout the cabin.
Honda said it will replace inflators on 2 million vehicles, mostly in Florida, Puerto Rico and other regions with high humidity. NHTSA is investigating a link between humid weather and the propellant in the canisters malfunctioning. Nissan is calling back about 228,000 vehicles in the U.S. Toyota recalled 766,000.
While the trend toward global parts sharing may cause bigger recalls now, it remains a prudent cost-saving strategy for the industry.
“You are not starting from scratch and designing a new part for each vehicle,” Schroeder said. “Every automaker is moving in this direction.”
Ford, for instance, is slashing the number of global platforms it will use to nine from its current 15, a move it says will increase assembly efficiency and flexibility.
Those nine platforms will be the foundation to build vehicles with many of the same transmissions, engines, infotainment systems and other parts. The cars will look and feel different, with different sheet metal and interiors — some will be SUVs such as the Escape, others sedans such as the Focus — but much of the guts will be the same.
Honda just opened a factory in Celaya, Mexico, where it builds the Fit. Later this year, Honda will add the HR-V, a small crossover that will share the same platform and many parts.
Volkswagen just launched its MQB platform with the introduction of the latest generation of its Golf and Audi A3 sedans. The platform will serve as the underpinning of VW’s next generation Jetta, Passat and Tiguan vehicles. It is designed to allow VW to mix and match various engine and transmission choices among the cars. It is doing the same with a modular infotainment system.
Mosquet says the seed for this year’s wave of recalls was planted more than a decade ago, as the industry started to adopt its global approach to car making.
But now the industry has learned how to better manage a global supply chain, and the problems should subside. Moreover, as new cars become increasingly connected to the Internet and wireless networks, automakers will be able to collect defect and safety data more quickly, providing for early detection of problems, Mosquet said.
“The increased focus on recalls reflects the expectation for both the consumer and the industry of a zero-fault car. There is no mistake that should be left for later,” he said. “That hasn’t always been the case.”