Executive Automotive Analyst
NADA Used Car Guide
NHTSA didn’t see much in the way of recalls in its first 20 years of history, but that started to change in the mid-1990s. From 1994 to 2013, the number of recalls jumped dramatically – an average of 177 per year – 86% from the prior period average. The flow of information from consumers and dealers made possible by the internet is the most likely reason for it; and vehicles have become highly complex machines.
Safety Concern and Number of Vehicles Affected Can Affect Market Performance:
Extent of damage largely determined by 2 factors: media coverage and brand reputation prior to recall.
There’s Only Mild Evidence to Suggest GM Prices Are Being Affected by Recalls:
Toyota recall took higher risk, which may have come from higher quality expectations for Toyota vehicles.
Evidence from Recalls Suggests Model Age also Influences Recall Impact:
It could be because older models are less associated with a brand’s current product image.