6th Annual State of Automotive Recalls Summit
2018 Recap • Number of vehicles recalled in the U.S. has stabilized since elevated activity during 2014 - 2016 • Number of individual campaigns greater than years of exceptional activity • Number of vehicles affected by recalls is consistent with prior year, and vehicles involved in campaigns other than Takata inflator recalls is consistent with activity since 2015. • Approximately 24 million vehicles recalled exclusive of Takata inflators • Six non-Takata campaigns in 2018 affected more than 1 million vehicles (46% of non-Takata recalls): • FCA electrical system: a short circuit in the vehicle’s wiring may prevent cruise control from disengaging (4.8 million vehicles) • Ford seatbelts: sparks from the deployment of the front seatbelt pretensioner may ignite materials within the B-pillar area (1.6 million vehicles) • Ford steering wheel: steering wheel may detach while driving (1.3 million vehicles) • Ford fuel system: cannister purge valve may malfunction and cause an engine to stall while driving without the ability to restart the vehicle (1.3 million vehicles) • FCA latches: tailgate latch actuator limiter tab may fracture and cause tailgate to unlatch while driving (1.1 million vehicles) • GM steering: electric power steering assist may be lost momentarily (1 million vehicles) 2
2018 Recap 2018 Recall Sizes • Largest recall of 2018: • Issued by FCA related to 2014 – 2018 Dodge, RAM, Jeep and Chrysler vehicles may experience electrical short preventing cruise control from disengaging • 4,846,885 vehicles affected • Smallest recalls of 2018 • 2 vehicles recalled by Bugatti and Mercedes-Benz 3
2018 Recap Sources: Traffic Volume Trends November 2018, Federal Highway Administration 1 Number of motor vehicles registered in the United States from 1990 to 2017, statista 2 4
2018 Recap Source: Average Age of Automobiles and Trucks in Operation in the United States, Bureau of Transportation Statistics 3 5
2018 Recap Source: Carfax Vehicle Recall Check 4 6
2018 Recap Takata Update • All remaining vehicles were scheduled to be recalled by 12/31/2018 (all unrepaired non-desiccated PSAN) 5 • All like-for-like replacements scheduled to be recalled by 12/31/2019 5 • On December 21, 2018, the Independent Monitor of the Takata Recalls issued a second report about the state of the Takata recalls • As of October 2018, approximately 17 million vehicles still had unrepaired defective Takata airbag inflators • The Report discusses initiatives implemented by manufacturers resulting in unprecedented increases in recall completion percentages, especially for the older and more dangerous vehicles affected: • Improving data quality • Segmented analysis • Communications • Overcoming owner inconveniences • Dealer engagement • Third party engagement • Canvassing 6 7
2018 Recap Takata Update • As of January 18, 2019, the overall recall completion percentage for Takata recalls was 65% 5 • The completion percentages for Priority Groups 1 – 9 are available at NHTSA.gov : 8
Data Analysis and Review: Recall and Defect Overview 9
Recall and Defect Overview Recall Data Analysis: Process and Background • Information downloaded from NHTSA website (www.nhtsa.gov) for historical recalls dating back to 1966 • NHTSA data provided detail regarding NHTSA campaign number, manufacturer, model and model year, component, total units affected, and certain additional fields • Stout analyzed recall trends for OEMs across various component groupings and timeframes 10
Recall and Defect Overview Year in Review: Stabilization in the Industry • Takata inflator recalls have abated, providing insight into industry recall activity • Units affected by recalls in 2018 nearly identical to 2017 • Non-Takata inflator activity is consistent over past four years • Approximately 24 million vehicles recalled for non-Takata inflator defects in 2018 • Despite stabilization in number of vehicles recalled, number of campaigns has increased • Average recall size declining • Airbag recalls not associated with defective Takata inflators still represent the greatest number of recalls, however electrical recalls affected more vehicles in 2018 (significantly influenced by FCA cruise control recall) 13
Recall and Defect Overview Analysis by Size of Recall • Large recalls may be the most newsworthy, but historically have not been the most prevalent • 65% (on a unique campaign basis) involve fewer than 10,000 units in 2018, many with significantly less • However, recalls of greater than 100,000 units consistent involve more than 85% of vehicles affected by recall in any year. • There has been a steady increase in the number of recalls involving fewer than 100,000 units since 2014 • Recalls over 100,000 units represented less than 20% of all unique recalls each year since 2014. • We observe certain differences for large recalls as compared to small recalls, such as • Differences in completion percentages • Differences in age of vehicles involved • Differences in frequency of suppliers being named in DIRs 14
Supplier Identification: 573 Letter Review 20
Supplier Identification Part 573 Letter Review For each recall initiated, OEMs are required to submit a Part 573 Report that serves as notification to • the U.S. Department of Transportation, National Highway Traffic Safety Administration that a defect related to motor vehicle safety or noncompliance with Federal Motor Vehicle Safety Standards exists Required sections of report include: • Manufacturer, Designated Agent and other Chain of Distribution Information • Identification of the Recall Population and its Size • Description of the Defect or Noncompliance and Chronology of Events • The Remedy Program and its Schedule • Manufacturer of Defective Component • 21
Analysis of Part 537 Letters Supplier Identification: Observations and Conclusions • Review of 573 Reports indicates continued trend of more frequent supplier identification, particularly for certain components • Both in terms of number of campaigns and as a proportion of total campaigns • Airbags, electronic stability control, and hybrid propulsion represent components where supplier is most likely to be identified • Proportion of suppliers identified in recalls involving design related defects is declining, however suppliers named in manufacturing related defects at levels not seen since 2008 27
Recall Completion Percentage Overview 28
Recall Completion Percentage Overview Recall Completion Percentage Review • NHTSA requires that beginning the quarter after the start of a recall, the manufacturer must submit a Quarterly Progress Report for six consecutive calendar quarters. The deadline for the report is the 30th day of the month following the quarter’s end. • In analyzing this data, Stout linked Quarterly Progress Reports to NHTSA’s larger recall database using campaign numbers in order to analyze trends in completion rates across different subsets of recall data. • Required Data to be disclosed includes: • NHTSA-assigned recall identification number • Manufacturer-assigned recall identification number, if applicable • Various dates of notification for dealers and purchasers • Number of items involved in the recall • Number of items at respective quarter’s end that have been remedied • Number of items as respective quarter’s end that have been inspected and determined to not need a remedy • Number of items unreachable for inspection • Number of items returned and/or repaired by dealers, retailers and distributors 29
Recall Completion Percentage Overview Recall Completion Percentage - Highlights • Three recent campaigns achieved 100% completion: • Model Year 2016 Honda Clarity – • Fuel cell control unit may cause loss of power • 471 vehicles affected • Model Year 2019 Subaru Ascent – • Missing spot welds in B-pillar area • 293 vehicles affected • Model Year 2018 Rolls-Royce Ghost – • Head airbags may not fully inflate • 3 vehicles affected 30
Recall Completion Percentage Overview Recall Completion Percentage - Highlights • Older and larger campaigns that have achieved notable completion percentages: • Model Year 2001 - 2002 Dodge Dakota, Durango, Ram van and Ram pick-up trucks vehicles – • The ignition / park shift interlock system may become inoperative, allowing the shifter to be moved out of the “Park” position with the ignition key removed; this can also allow the ignition key to be removed when the shifter has not been placed in the “Park” position. • 576,418 vehicles affected • 6 - 8 years old at time of recall • 80.8% completion • Model Year 1999 - 2000 Chrysler Cirrus, Dodge Stratus and Plymouth Breeze vehicles– • Power steering fluid leakage in the presence of an ignition source may result in an under hood fire. • 216,299 vehicles affected • 6 - 8 years old at time of recall • 87.0% completion 31
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