Recalls: are we being honest?

  14 April 2014

Vehicle recalls are back in the news. The decision by Toyota to pull-in 6.4 million vehicles (including 35,000 in the UK) for five separate repairs hit the front pages here.

 However, there’s a far more serious issue running with GM in the States, which has received barely a mention on this side of the pond.

 The US’s largest car manufacturer is currently embroiled in legal and Congressional battles over allegations that it covered up a design fault in the ignition lock on some of its small cars. The claims date back to at least 2005 and, by GM’s own admission, have been associated with the death of at least 13 people.

 To date, 2.6 million cars have been recalled and GM has just announced it is setting aside $1.3bn in Q1 to cover the cost. And, of course, that is before the legislators and lawyers get stuck in. Earlier this year, Toyota agreed a $1.2bn settlement with US regulators after a four-year inquiry into its reporting of safety issues.

 Cars are complex and recalls happen. All the evidence suggests that it’s not the recall that’s the issue; it’s how you handle it that counts. Any attempt at a cover up is very bad news indeed, as Toyota discovered.

 I worked for a car manufacturer in the early 90s and the policy then was quite clear – recalls were not announced publically and were dealt with as quietly as possible. It would be nice to think things have changed, but a quick search of the VOSA website reveals 513 separate recall notices were issued in the UK last year. Okay, some of those were for trucks, motorbikes and ATVs but I don’t think I’ve seen more than half a dozen press notices about cars in 12 months.

 Meanwhile manufacturers are tightening up on warranty and goodwill claims and are often quick to blame dealerships for poor customer relations. As always, it’s the retailer who is on the front line.

 Handling a recall, or any other warranty matter, can be a positive experience – but dealership team need to know the manufacturer is both being honest with the customer and will back their decisions. Anything less than total transparency is likely to backfire, big time. It’s an expensive lesson that GM seems to only just be learning.

 Rupert Saunders

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