Expert Risk Articles

Record year for car recalls

Automotive recall cases are becoming more frequent with last year setting a new record for incidents in the US. Shorter development cycles, faster production, global suppliers and more technical complexity are among the reasons why.


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Almost 64 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, according to official government data.

Almost half of these safety issues were related to passenger protection systems, followed by problems with electronic components and brake defects.

Meanwhile, in Germany, the number of recalls also sharply increased - 1.9 million cars were recalled in 2014 according to data from the Center of Automotive Management at the University of Applied Sciences in Bergisch-Gladbach, almost twice as many as in the previous year (1.1 million). Most of the problems in Germany were again linked to passenger protection systems. Defective airbags were responsible for a large number of recalls, having been delivered to multiple manufacturers by the same supplier.

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There are many reasons behind the rise in recalls. The automobile industry is extremely competitive and 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. And recalls are also a sign that safety has increased: manufacturers now admit errors rather than hide them.

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.

Meanwhile, 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.