They Keep Calling “Em Back -- Is it Any Wonder Car Shoppers Are Holding Back?


So many recalls, so little time. No wonder so many automakers are looking at tough times.

Ford (NYSE:F) is just the latest to say it’s calling back 1.4 million vehicles in North America. Most involve Ford Escape and Mercury Mariner SUVs from the 2008 through 2011 model years over power steering issues.

Continue Reading Below

Separately, Ford’s recalling 196,639 Taurus sedans – model years 2010-2014 – for license plate lamp assembly defects. Apparently moisture can cause some to short circuit, and create a fire hazard. Not good. But then again, when it comes to recalls in general, they’re not unique to Ford.

Far worse are all the ongoing recalls at rival General Motors (NYSE:GM). To date, GM has called back nearly 14 million vehicles, the most in so short a period in its 100-year history and more than all its rivals combined.

But that doesn’t mean its rivals haven’t had plenty of problems of their own. Toyota (NYSE:TM) just announced at least three service actions, involving everything from faulty brakes to software glitches that could prevent airbags in some Highlander SUV models from releasing. Ditto Nissan for similar air bag issues involving more than one million vehicles.

Then there’s Mazda, recalling more than 52,000 Mazda 6 sedans over spider webs in some engines. Talk about weaving a tangled sales web!

In case you’re counting, that’s more than 23 million vehicles that various automakers have recalled in the last few months alone. Some of these issues are urgent, some just cautionary. (After GM’s well publicized initial ignition switch problems, would you wait on announcing even minor defects in any of your company’s vehicles?)

The problem with automakers being on top of their problems is that it creates even more problems for the automakers. More potential buyers are leery, and just scared. Many likely figure they’ll make do with the aging vehicle they’ve got rather than take a chance on any new vehicle these guys are pushing. Because it’s not just the sheer size of all these recalls but the now dozens of vehicle product lines they include.

It’s getting so bad that I once half-joked on-air it might be easier for the auto giants to report the vehicles that are not being called back than the ones that are! That’s how sweeping and pervasive these recalls have gotten.

People are scared, and when they’re scared, they’re clearly less inclined to buy, at least for now. What’s surprising right now is that while auto sales are predictably sluggish, they could be a heck of a lot worse. Auto analysts tell me that’s because the average car on the road is so old – close to nine years. Many owners have no choice but to replace their vehicles. But they’re clearly taking their time and many are waiting for just the right time, and the right sale.

And that gets us to Detroit’s other problem. Once sales do pick up -- and, save recalling every car ever made, they will pick up -- I suspect it will come at a cost to the automakers. Big sales, big rebates, big incentives. Such deals will move vehicles out of the showroom, but they might not show much in profits for the auto giants when they do.

That’s what happens when you keep recalling vehicles. For the automakers, their abundance of caution shows they’re being proactive and protective. But is it any wonder the more they do it, their customers are being so conservative?

The flipside of all this is that all the automakers seem to be recalling some sort of vehicle, so there’s some perverse comfort in “recalling company.” But it’s hardly reassuring when potential customers hold back buying from any company.

What do you think?

Click the button below to comment on this article.