Auto recalls are up, but many warranty repairs not completed

The number of vehicles recalled in the U.S. reached a record high last year, but even as important safety recalls get more attention in the U.S., drivers often fail to get their vehicles repaired. That means millions of people in the U.S. are driving, buying or selling potentially dangerous vehicles.

Research released earlier this year from Carfax indicates that more than 46 million cars nationwide have at least one safety recall that's never been fixed, and 5 million of those vehicles were bought and sold in 2014. That is an enormous increase over the 2013 figures, when Carfax estimate there were just 3 million cars on the road with an open safety recall.

One in three minivans and one in five SUVs has an unfixed recall, according to the report. California, Texas, Florida, New York and Pennsylvania have the highest number of unfixed recalls. States with the highest ratios of unfixed recalled cars include West Virginia, Michigan, Mississippi, Wyoming and New Jersey.

“America’s cavalier response to manufacturer safety recalls is putting lives at risk,” said Larry Gamache, communications director at Carfax. “Every morning millions of people drive to work, school and other places in a potential ticking time bomb. Fires, crashes and serious injury are just a few consequences of letting recalls go unfixed. The minor inconvenience that comes from having a recall fixed pales in comparison to what can happen if you don’t.”

The National Highway Traffic Safety Administration (NHTSA) requires automakers to quickly notify regulators and owners when a defect is uncovered. But that doesn't mean that owners actually get the repairs made. A 2011 audit by the General Accounting Office (GAO) found that less than 70 percent of vehicles under recall were actually repaired.

The problem is only getting worse as the pace and size of recalls increases. There were 64 million vehicles targeted by recalls in 2014, twice the previous record set in 2004. The recent Takata airbag recall has thrown this problem into sharp relief.

In that case, 17 million vehicles manufactured between 2002 and 2008 by 10 different automakers were affected. The airbags could potentially deploy explosively, injuring or killing drivers.

Earlier this year, U.S. Transportation Secretary Anthony Foxx announced Takata would receive a $14,000 per day fine for failing to fully cooperate with the NHTSA's investigation into the defective airbags. Late last year, NHTSA issued two Special Orders to Takata requiring the company to provide documentation and other material relating to the agency’s ongoing investigation.

A few days after announcing the fines, the DOT also issued an order requiring Takata to preserve all air bag inflators removed in the recall process to use as evidence for both NHTSA's investigation and private litigation cases.

Reaching out to drivers

OEMs are upping their efforts to improve recall response rates, particularly for the Takata airbags. Chrysler, Ford and Toyota have all reached out to drivers via direct mail and phone campaigns. Honda, meanwhile, has launched a massive advertising campaign to improve recall response. According to the company, as of March of this year only 1.1 million of the 8 million defective airbag systems in Hondas in the U.S. had been fixed.

The automaker is spending millions on ads in 120 newspapers and for radio spots in 110 markets. The company is also sponsoring custom Facebook posts that will appear in owners' timelines. Honda reported it was unable to locate nearly 18,000 vehicle owners affected by the recall.

The federal government is also considering how to deal with unaddressed safety repairs. In February, Secretary Foxx, National Highway Traffic Safety Administrator Mark Rosekind, elected officials, representatives from the rental car industry, and consumer safety advocates asked Congress to pass legislation that would require rental car agencies and used car dealers to fix safety defects before renting or selling vehicles subject to a recall.

The GROW AMERICA Act (a massive, six-year infrastructure and transportation spending bill) includes provisions that would require rental car agencies to remedy safety defects under recall, and require used car dealers to do the same before selling the vehicles. New cars have to be fixed before sale under current law.

“Every vehicle under an open safety recall should be repaired as soon as possible,” Foxx said in a prepared statement. “Requiring rental car agencies and used car dealers to fix defective vehicles before renting is a common-sense solution that would make our roads safer. Safety advocates and the rental car industry have taken a stand for safety, and we need Congress to do so as well.”

The Obama Administration also announced a proposed increase to NHTSA's budget in February, which would increase the agency's defect investigation budget to $31.3 million, approximately triple the current budget.

Other lawmakers hope to force states and consumers to take action. In March, U.S. Senators Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.) introduced legislation that would require state departments of motor vehicles and registration agencies to notify vehicle owners about open safety recalls. The Repairing Every Car to Avoid Lost Lives (RECALL) Act would also require owners to complete all safety recalls before renewing their registration.

“Unrepaired safety defects endanger everyone on America’s roadways. Important recall notices can get bogged down with legalese, and busy consumers can miss a lifesaving update,” Blumenthal said. “This legislation provides a common-sense avenue to ensure every driver is reminded and encouraged to make the necessary repairs and keep unsafe cars off the roads.”

Exceptions would be granted if the owner wasn't notified of the recall during the renewal process, if the manufacturing lacked the parts to complete the recall, or if the owner demonstrates that they had no reasonable opportunity to fulfill the recall. The DMV could then grant a temporary registration for up to 60 days.

The RECALL Act will likely face an uphill battle in the Senate, and if passed would pose significant logistics issues for state DMVs and drivers attempting to verify repairs.


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<p>The number of vehicles recalled in the U.S. reached a record high last year, but even as important safety recalls get more attention in the U.S., drivers often fail to get their vehicles repaired. That means millions of people in the U.S. are driving, buying or selling potentially dangerous vehicles.</p>
<p>aftermarket, auto parts manufacturers, auto recalls, warranty repairs, National Highway Transportation Safety Administration, NHTSA, Carfax, Takata, U.S. Transportation Secretary Anthony Foxx</p>

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Capgemini tackles data analytics with new automotive insights laboratory

Capgemini has launched a new Automotive Insights Laboratory, a virtual lab that will use Big Data and analytics to help car manufacturers anticipate customer behavior. The service, part of the company's AutomotiveConnect offering, has already helped OEM clients improve customer targeting, boost warranty claims predictions and increase sales. It also could potentially impact the way automakers approach service.

"The industry needs to improve its ability to combine intelligence about vehicles and consumers to produce insights that can be actioned. Companies should, for example, be able to predict when a consumer will be looking to change their car, and what sort of car they are likely to buy," said Kai Grambow, global head of automotive, Capgemini. "Companies need to start treating data like the new oil powering this industry. Like oil, data can be difficult to find and extract, but becomes a hugely valuable asset once refined."

The lab uses data from macroeconomic trends, geographic habits, social media, and information provided from the manufacturers themselves to improve the development of business strategies, define customer service offerings and identify new opportunities. According to Capgemini, the lab has helped clients improve consumer profiling and targeting, renewal and loyalty, and enhanced predictions for pricing, demand and warranty claims.

According to Nick Gill, chairman of the global automotive sector at Capgemini, the Insights Laboratory evolved out of discussion about the influx of customer and vehicle data now available to automakers, and how to make the best use of it. "We are collecting all of this data to get to know the customer better, and collecting all of this intelligence from the car," Gill says. "What are we going to do with all of this massive, big data that we are going to collect?"

Automakers can approach the company with specific questions or problems, and have their own data mapped to economic and socio-demographic data, along with industry data from Edmunds, JD Power, and other sources. "We've been able to find some amazing things for several clients," Gill says. "In an industry where a one or two percent change is significant, we can come up with solutions that can influence results by as much as 10 or 15 percent."

Among the benefits experienced by clients using the service: campaign revenue increased through four-fold improved customer targeting; a 10 percent cost reduction via smaller target group sizes; doubling the accuracy of warranty claims predictions; and doubling or tripling of sales conversions via up-sell and cross-sell opportunities.

"You never have all of the data you want, but you often have more than you need," Gill says. "Many of our insights have come from public domain data. For example, we worked with an OEM on where to market electric vehicles. Just taking information about where people live, their environmental affinities, spending power, what types of houses they live in, all of these things influence the propensity for buying an electric vehicle. You can map that and not only say a certain type of person is likely to be a buyer, but you can focus on specific dealerships because of the qualities of the people living nearby."

So far, most of the projects have focused on the sales side: determining who might buy a new car, when they are likely to buy, and how much they would be willing to pay. Gill says that service is likely to be just as big an area of interest because it is a more predictable operation than sales.

"From the connected vehicle side, there are so many variables," Gill says. "If you have a problem, do you need to solve it immediately or defer it? You can develop some more menu-based services based on those client needs and consumer needs. There is a lot more we can do with the data on the service side that we are not doing today."

So far, telematics data has not played a large role, however. "There's actually very little communication between cars and hubs today," Gill says. "The insurance industry is probably doing more of it than the manufacturers. That's a wake-up call for the industry. I'm nervous that we may let the moment pass us by and other industries like insurance will seize the data opportunity ahead of us. Connected vehicles just aren't that connected today. Not many companies are leveraging that data a meaningful way."

The AutomotiveConnect line of offerings includes consulting, technology expertise and digital services. The Insights Laboratory is the key feature of the Connected Insights focus area, while the Connected Customer module helps manufacturers better segment their customers into the proper channels. The Connected Vehicle focus area keys in on telematics and consumer connectivity in the vehicle.

Gill says the auto industry will continue to grapple with data management as the number of vehicles on the road increases and the number of sensor points available expands.

"We're really at the beginning of a journey, and we're just now seeing what kinds of things we can do with the data," Gill says. "Most consumers are very happy these days to share data, as long as they trust the company and get a benefit from sharing the data. The industry can gain a deeper understanding of the customer and tailor services around that."


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<p>Capgemini has launched a new Automotive Insights Laboratory, a virtual lab that will use Big Data and analytics to help car manufacturers anticipate customer behavior. It also could potentially impact the way automakers approach service.</p>
<p>aftermarket, Capgemini, Automotive Insights Laboratory, Big Data, analytics, AutomotiveConnect, Kai Grambow, automotive service, warranty claims predictions</p>

Auto Care Association applauds FTC settlement with BMW on warranties

The Auto Care Association applauds the settlement announced by the Federal Trade Commission (FTC) against the MINI Division of BMW over its violation of the Magnuson-Moss Warranty Act.

As a result of official complaints to the FTC by the Auto Care Association and other organizations, the FTC has charged that BMW’s MINI Division violated the Magnuson-Moss Warranty Act by telling consumers that BMW would void their warranty unless they used MINI parts and MINI dealers to perform maintenance and repair work. 



“It’s against the law for a dealer to refuse to honor a warranty just because someone else did maintenance or repairs on the car. As a result of this order, BMW will change its practices and give MINI owners information about their rights,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. 



The order also:

• bars BMW, in connection with the sale of any MINI Division good or service, from representing that to ensure a vehicle’s safe operation or maintain its value, owners must have routine maintenance performed only by MINI dealers or MINI centers, unless the representation is true and BMW can substantiate it with reliable scientific evidence; and

• requires BMW to provide affected MINI owners with information about their right to use third-party parts and service without voiding warranty coverage, unless BMW provides such parts or services for free.

“Our government affairs department has worked diligently to bring this matter before the FTC and, while it’s been long overdue, we are thrilled to see them finally take action against the clear-cut violation of the Magnuson-Moss Warranty Act perpetrated by BMW’s MINI Division,” said Kathleen Schmatz, president and CEO, Auto Care Association. “It is our hope that all vehicle manufacturers are now paying close attention to their communications with vehicle owners concerning their warranties.”

The Magnuson-Moss Warranty Act contains a provision that prohibits companies from requiring that consumers – in order to maintain their warranties – use specific brands of parts or specified service centers, unless the part or service is provided to the consumer without charge.


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Auto Care Association
<p>The&nbsp;Auto Care Association&nbsp;applauds the settlement announced by the Federal Trade Commission (FTC) against the MINI Division of BMW over its violation of the Magnuson-Moss Warranty Act.</p>
<p>aftermarket,&nbsp;Auto Care Association, Federal Trade Commission, FTC, MINI Division of BMW, Magnuson-Moss Warranty Act, Kathleen Schmatz</p>

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Arnott extends lifetime warranty to products sold in European Union

Arnott Air Suspension Products, a leader in aftermarket air suspension products and accessories, is extending its exclusive limited lifetime warranty to the European Union.

Effective January 1, 2015, all new and remanufactured air springs, air struts, shocks, and coil spring conversion kits sold in the European Union are backed by Arnott's Limited Lifetime Warranty. The move marks another milestone in the company's worldwide growth.

Less than one year ago, Arnott Air Suspension Products opened a sales and distribution facility in the Netherlands, dedicated to providing the European Union with local sales and support, faster shipping, payment and bank transfers in local currencies, and an easier way for the growing EU customer base to return and sell air suspension cores to Arnott.

"Arnott's Limited Lifetime Warranty provides European Union customers with even greater peace of mind and enhanced investment protection," said Todd Nash, Senior VP of Global Marketing and Sales. "Arnott's Limited Lifetime Warranty is one of the most impressive in the automotive marketplace, exceeding that of the Original Equipment." 

Arnott Air Suspension Products also supplies new air suspension compressors to the automotive aftermarket, and these units will continue to be backed by a limited two-year warranty wherever they are sold.


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Arnott Air Suspension Products
<p>Effective January 1, 2015,&nbsp;all&nbsp;new and remanufactured air springs, air struts, shocks, and coil spring conversion kits sold in the European Union are backed by Arnott&#39;s&nbsp;Limited Lifetime Warranty.</p>
<p>Arnott Air Suspension Products, aftermarket air suspension products, air springs, air struts, shocks, coil spring conversion kits, European Union</p>

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ASE’s Winter 2015 testing session will mark the debut of a brand new program – the L3 Light Duty Hybrid and Electric Vehicle Specialist advanced certification. We gave you a sample of what to expect in last month’s ASE Question of the Month and thought we’d do a follow up this month to mark the event.

 

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