Record number of vehicle recalls

Worldwide recall rates of automobiles have reached a new high. The US market is reporting alarming figures.

 

Almost 63 million cars were sent back to repair shops as a result of safety issues in the US in 2014 – more than twice as many as in 2004, the year which previously counted the highest number of recalls. Almost half of these safety issues were related to passenger protection systems, followed by problems with electronic components and brake defects.

 

In Germany, too, the number of recalls has sharply increased: 1.9 million cars were recalled in 2014. This is almost twice as many as in the previous year (2013: 1.1 million). Subaru, Toyota, Mercedes, BMW or VW – basically every auto manufacturer is affected, regardless of whether they are based in America, Asia or Europe. Most of the problems in Germany were again linked to passenger protection systems. Defective airbags were responsible for a large number of recalls: they had been delivered to multiple manufacturers by one and the same supplier.

 

It's not easy to explain the reasons for this negative trend. On the one hand, the automobile industry is extremely competitive. Car manufacturers are reacting to this by shortening development cycles even further, cutting production times and producing vehicles on an increasingly global scale, with more and more suppliers. At the same time, technical complexity is increasing and the risk of errors is growing. Almost one in two recalls today is related to electronic components. Another reason is that the same components are built into various vehicle types in parallel, which was the case with the airbags in 2014, for example. However, recalls are also a sign that safety has increased: manufacturers now dare to openly admit errors rather than hiding them.

“Automobile recalls occur more frequently in the US than in Germany because the American legal regulations are more stringent than in Germany.” Carsten Krieglstein, Head of Liability at AGCS in Germany
“Automobile recalls occur more frequently in the US than in Germany because the American legal regulations are more stringent than in Germany.” Carsten Krieglstein, Head of Liability at AGCS in Germany

Recall ignored – vehicle confiscated

 

It's basically unavoidable that safety-related errors are repeatedly discovered in vehicles. Allianz is urging the industry not to compromise on safety. At the end of the day, this is what consumer confidence is based on. But drivers themselves should also act appropriately when recalls are issued. “If your own car is the subject of a recall, you should take this information seriously for your own safety, and follow the manufacturer's instructions as soon as possible," says Carsten Reinkemeyer from the Allianz Center for Technology near Munich. If you don't follow these steps in Germany, you run the risk of your car being confiscated by the Federal Motor Vehicle and Transport Authority. In 2013, this happened to around 9,000 vehicles.

 

Allianz offers insurance coverage for product recalls for automobile suppliers via its industrial insurance subsidiary, Allianz Global Corporate & Specialty (AGCS). Suppliers are liable vis-à-vis automotive manufacturers for the quality of their components. This type of insurance policy provides cover for the costs resulting from a recall, for example, costs incurred by notifying customers, transporting vehicles or replacing defective parts.

 

US regulations particularly stringent

 

Depending on the market, insurers are confronted with varying regulations regarding vehicle recalls. “Automobile recalls occur more frequently in the US than in Germany because the American legal regulations are more stringent than in Germany,” explains Carsten Krieglstein, Head of Liability at AGCS in Germany. In the US, breaching a technical norm, such as excessively high emission values of a fuel injection system, is already a reason to recall a vehicle. In Germany, a manufacturer is only obliged to issue a recall if there is a real risk of bodily injury resulting from a technical defect of the car.

“Customers should take recalls seriously for their own safety and follow the manufacturer's instructions as soon as possible." Carsten Reinkemeyer from the Allianz Center for Technology near Munich
“Customers should take recalls seriously for their own safety and follow the manufacturer's instructions as soon as possible." Carsten Reinkemeyer from the Allianz Center for Technology near Munich

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer:

 

Bettina Sattler
Allianz SE
Phone +49.89.3800-16048
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