Number of Auto Recalls Expected to Rise in Future

Posted By The Law Office of Daniel D. Horowitz, III, PC || 01-Feb-2016

Auto recalls are expected to increase in frequency in the future as a result of increased scrutiny by federal regulators.

According to a 2015 report, small recalls were up 42 percent from 2013. The report also found that nearly 90 percent of recalls in 2014 were initiated by car manufacturers. The authors of this study suggest that advancement in the following areas will usher in a new era of recalls:

  • Proactive federal regulation
  • Pressure to increase recall completion rates
  • Global recalls potentially endangering the financial viability of large suppliers
  • Higher fines and potential threat of criminal penalties against original equipment manufacturers and employees
  • Cost recovery reactions throughout the supply chain
  • Bipartisan congressional support for increased penalties and oversight

Another factor pointing to a greater number of recalls in the future is that there have been far more complaints filed in 2014 than 2013 – to be exact, up to 75,000 from 30,000 the year before. Based on this alone, legislators are prepared to act.

At the highest risk for recall are the following component groups:

  • Early Warning Reports: Components that routinely show up on these quarterly reports will be on the NHTSA’s radar
  • Airbags: Increased regulator attention and persistent supplier problems elevate the risk of future airbag recalls.
  • Electrical, fuel system, power train, steering, and brake system: Based on current investigations by the HHTSA, recalls for issues related to these systems are probable.

Automakers like GM are now beginning to proactively plan for future recalls as they assess the potential costs.

Categories: Recalls
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