Why Massive Auto Recalls Are Becoming the Norm

Somewhat paradoxically, cars are now more complex and use more of the same parts.

The ravishing 2010 Corolla, one of the vehicles involved in Toyota's latest recall. Image: Toyota

Toyota, the world's largest automaker, announced the recall of some 6.4 million vehicles worldwide, to address a variety of issues concerning nearly 30 different models. The Toyota recall programs, which include fixing a faulty cable for controlling airbags, comes hot on the heels of a massive GM recall for faulty ignition switches that have been attributed to 13 deaths. All told, the two sets of recalls include some 9 million cars, which makes for a natural question: Why are so many cars being recalled?

What's clear is that more vehicles are indeed being recalled now than in the past—and that it's indeed part of a rising trend. Earlier this week, the National Highway Traffic Safety Administration released new data showing that US companies had already recalled about 11 million vehicles in the US this year, a number that will jump by about 1.8 million with the addition of Toyota's two most recent US recalls. According to the LA Times, that's half of last year's total, and "more than a third of the recent high of 30.8 million vehicles in 2004."

Last week, the Chicago Tribune's Robert Duffer offered another blunt statistic, writing that "In 2013, more cars were recalled than were sold by nearly 45 percent." While the number of cars recalled includes far more model years than just 2013, and not all recalls involve safety-critical components, it's still a jarring statistic—especially considering that Americans are buying fewer cars. How are so many cars faulty?

First, there's the question of complexity. Cars have continually gotten more complex, both due to legislation that requires certain improvements, such as new safety requirements or fuel efficiency standards, and because auto buyers seem to have an endless appetite for new features.

A March report from the Society of Automotive Analysts put part of the blame on increasing recalls on technology, writing that "the rise in non-engine and electrical related recalls suggests an increasing impact from vehicle technology." In essence, as cars get more complicated, more things can go wrong.

This decade has already seen more cars recalled than the entirety of the 1970s, despite there being fewer recall campaigns. Image: Society of Automotive Analysts/NHTSA data

It's a problem evident in the GM ignition switch recall. Ignition switches on cars including the Chevrolet Cobalt and Saturn Ion could accidentally flip from "on" to "acessory" or "off," and turning a modern car off at speed means losing power steering, power brakes, stability control, and other electronic systems we rely on to drive safely; a sudden loss of power can make a car far more difficult or impossible to drive, resulting in fatalities.

The SAA report also states that it is hard to refine its conclusions beyond that, because of the difficulty of drilling recall data down to a part-by-part basis. Yet a 2005 New York Times story about the NHTSA's Office of Defects Investigation explained that "safety experts and manufacturers point to several other reasons, including the increasing complexity of automobile engineering and the sharing of parts across multiple vehicle lines."

That last point is key. The average number of vehicles per recall has increased since the NHTSA first started instituting recalls in the 1960s, and it's in large part because of the increased sharing of parts across models. Designing and testing auto parts is a laborious, expensive process, and it's a hell of a lot cheaper to make one windshield wiper motor and share it across as many cars as possible as it is to design a bespoke model each time. But that means if a part fails, it affects a lot of vehicles.

Perhaps the best example is a recent Aston Martin recall that affected around 75 percent (!) of its cars built since 2007. The problem was caused by accelerator pedal arms made with a counterfeit plastic; the same accelerator arm design was used across the range of Aston Martin models.

The amusing nature of an extremely-high end manufacturer being brought to its knees by faulty plastic notwithstanding, it also points to another issue with modern manufacturing: the long, convoluted supply chain. Remember, parts design isn't cheap, and along with making parts more universal, it's often cheaper to outsource. 

That's what happened with Aston Martin: The company found to be using counterfeit plastic was a tier three supplier—a sub-sub-subcontractor, which Aston Martin had no direct oversight over. In the case of Toyota's largest new recall, which concerns the potential breakage of a spiral cable powering the driver's air bag when the steering wheel is turned, the cable in question is also built by a subcontractor.

The SAA report also found, based on NHTSA data, that the number of recalls for safety-related components has also increased, although the data is more volatile than trends as a whole.

The SAA report also highlighted the supply chain as a recall driver, noting that "increasing number of OEM/supplier collaboration agreements" and "automakers’ increasing efforts to recover costs from suppliers" are both factors. In essence, more manufacturers are relying on third parties to manufacture parts, and leaning on them to make parts more cheaply.

There's a third factor that ties in as well: Automakers are also recalling more cars because regulators have taken a much more aggressive stance. Toyota was handed a record $1.2 billion fine in 2010 for its "unintended acceleration" woes, which sent a message to automakers that they need to find problems and address them quickly. GM is currently being fined $7,000 a day—a far more paltry sum, of course—for not delivering recall data to regulators quickly enough.

And as the aforementioned Times article explained, a law passed in 2000, right after the Firestone fiasco, called the TREAD Act, required automakers to provide the feds with quarterly safety reports, as well as immediately reporting problems as they arrive. From the Times:

Automakers acknowledge that the Tread Act has had a considerable effect on how often they issue recalls. "The Tread Act certainly has been an important part of this over the last four or five years," said Bob Ottolini, the executive director of product development quality at General Motors, the world's largest automaker. "All of us, certainly General Motors has, put into place much more rigorous processes to understand our data."

Prompter recalls are a good thing, as they can potentially bring critical problems to light for consumers. Of course, whether or not those drivers comply is another matter; the NHTSA says only about 70 percent of cars affected by recalls actually get the fix.

In any case, the growth in recalls has certainly been fueled by regulation, and it's also a consequence of how we build cars today. When things go right, it makes for cheaper, more advanced automobiles. As The Economist noted today, "Studies from J.D. Power and Associates indicate that both initial quality and long-term vehicle reliability have never been better." So automakers are making better cars, but because those cars have more parts than ever—parts that are increasingly being pulled from the same bins—when one thing goes wrong, it affects a lot of people's rides. And that's not likely to change anytime soon; so we can expect the rate of vehicle recalls to continue to rise.