NADA Issues Special Report on Impact of Vehicle Recalls

Jonathan Banks
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.

Click here to read “The Impact of Vehi­cle Recalls on the Auto­mo­tive Mar­ket”

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.

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