Auto Recall Costs Rose Staggeringly in 2016, Recent Study Reports

Published Date : Feb 01, 2018

A new study that highlights the recall issues faced by the automotive industry over the previous years has come into light. A study by Alix Partners shows how in the year 2016, over $22 bn was spent on the recovery and recall costs. The enterprise improvement director Michael Held, mentioned at the global consulting firm AlixPartners, to Automotive News that vehicle manufacturers and suppliers spent estimated values of $17.5 billion on warranty and claims accruals in the year 2015.

The number of recalled vehicle in 2016 in the U.S. rose to 53.1 mn, from 50.8 mn in 2015. This was recorded to be the highest, according to the study with almost 4.5% rise. Almost half of this number of vehicles belonged to Takata Corp.’s airbag inflators or to the faulty ignition motor switches of General Motors. The combined resultant claim amount to almost 23 mn.

The study says that the number of electronic and electric related recalls have increased by almost 30 percent each year since the year 2013, in comparison with the 5% annual increases between 2007 and 2013. This exhibits a surge in interest in robust safety systems and sophisticated infotainment systems.

Recalls related to system integration can affect more numbers of vehicles than manufacturing issues, which are quite often restricted to a single plant or region with a limited time frame, according to the study published.