Automakers, facing U.S. fines, try novel ways to reach owners of recalled vehicles

WASHINGTON (Bloomberg) — The 63,000 spectators crowded in late January inside Atlanta’s Georgia Dome for a battle of college marching bands didn’t know they’d also be schooled in auto safety.

Between the Lincoln University Orange Crush Roaring Lions and the Bethune Cookman Marching Wildcats, event sponsor Honda Motor Co. flashed an alert on the stadium scoreboards. It listed 11 Honda and Acura models that need to have airbags replaced because they can malfunction and spray potentially lethal shards of metal into the vehicle.

Automakers, facing stiff fines for lackluster recall completion rates, are going to new lengths to reach owners of the millions of cars with known safety defects that remain on the road. Honda has even hired private detectives to track down owners of older vehicles. In addition to mailing the standard notification letters, General Motors has advertised recalls on Yahoo, YouTube and Pandora.

“It’s not going to do any good if we identify defects but don’t get them remedied,” Mark Rosekind, head of the U.S. National Highway Traffic Safety Administration, said in an interview. “It’s really the final action that needs to be taken to improve safety. Otherwise it’s diagnosis without treatment.”

Record recalls

A record 51.3 million U.S. vehicles were recalled last year following high-profile defects such as Takata Corp.’s exploding airbags, which have been linked to 10 deaths worldwide. But, on average, one out of four recalled cars still don’t get the free repairs.

For older cars, the completion rate is even lower. It’s 44 percent for vehicles between five and 10 years old. For vehicles older than that, it’s 15 percent, according to the Alliance of Automobile Manufacturers. Other countries achieve much higher average rates. It’s 80 percent in Japan, 92 percent in the U.K. and 100 percent in Germany.

NHTSA has taken steps to shake up automakers to leave no defect unrepaired.

The safety agency got Fiat Chrysler Automobiles to agree to follow industry best practices in recalls as part of a $105 million civil settlement reached last year after NHTSA documented problems with 23 different recalls by the company. One case the agency highlighted: a 2013 recall of Jeep Grand Cherokees in which only 320,000 out of 1.5 million affected vehicles had been fixed 21 months into the recall.

In January, the U.S. Transportation Department and 17 automakers agreed to a set of global principles that includes the goal of completing 100 percent of safety recalls, up from the current average of 75 percent, Rosekind said.

Reaching millennials

For its part, the government is planning an advertising campaign to raise awareness about recalls that’s modeled on efforts used to increase seat-belt use and cut down on drunk driving. NHTSA also developed a lookup tool last year on Safercar.gov so consumers can use a vehicle identification number to check for recalls.

NHTSA has also asked for public comments on whether its 46-year-old requirements for handling recalls — dictating everything from the wording on the first-class letters to be mailed to vehicle owners to the color of the envelopes — should be updated.

In the meantime, automakers are applying their marketing know-how to reach the next generation of vehicle owners who may not be communicating in ways that worked in the 1970s, he said.

“Millennials aren’t going to be looking for that envelope on their table,” Rosekind said.

Private eyes

Besides its Atlanta scoreboard messages, Honda recently took its recall messages to social media, running customized ads on Facebook targeting owners of recalled vehicles and changing its banner image on Twitter to raise awareness of the air-bag recall.

Honda has also given its 30,000 U.S. employees cards for handing out to neighbors or placing on the windshields of vehicles suspected of needing new Takata airbag inflators. It has hired detectives to track down the owners of older cars most at risk in the Takata recall.

“Communications around the Takata recalls have taken on a special sense of urgency given the tragic injuries and loss of lives,” Honda spokesman Chris Martin said in an email. “We are making a huge effort to reach customers.”

Even with the extra effort, Honda says it has only repaired 53 percent of the cars needing new air-bag inflators as of January. That is better than the 27 percent for the industry as a whole. In high-humidity areas, where the air bags are more prone to problems, Honda’s rate was 52 percent, compared with 34 percent for the industry.

Consumer research

Some of the automakers that have been fined by U.S. regulators for lax reporting of safety defects and handling of recalls have since tried new outreach tactics. GM in May 2014 agreed to pay a $35 million fine to settle a Transportation Department probe into how it handled the recall of 2.59 million small cars over faulty ignition switches linked to deaths in the U.S.

Since then, GM has experimented with customized direct mail, email, specialized ads on Yahoo, YouTube and Pandora, and going through its OnStar in-car communication system to notify customers of recalls.

The automaker followed up with extensive polling, learning that customers appreciated multiple mailings and offers to set up appointments and provide rental cars so they could get around while their vehicles were in the shop.

“We continue to work to better understand our customers’ response to recalls so we can further improve completion rates,” GM spokesman Tom Wilkinson said via email. “We’ll also continue to share what we are learn with NHTSA so that so that everyone can benefit.”

Older cars

Automakers took up the call NHTSA laid down in April and have embraced the goal of 100 percent recall completion rate, said Michael Cammisa, senior director of safety at the Association of Global Automakers in Washington. Among the biggest challenges are reaching owners of older vehicles, he said. A 10-year-old car might be on its second or third owner, with little regular contact with a franchised auto dealer.

“Companies are thinking more creatively and outside-the-box all the time,” Cammisa said. “We can’t be focused only on the mail.”

It will be hard to reach the 100 percent goal for cars more than 10 years old, said Martin Dowdall, vice president and general manager of automotive services at Stericycle Inc., a Lake Forest, Ill.-based company that helps manage recalls. Stericycle maintains call centers to give vehicle owners multiple reminders and also investigates title histories to help automakers track down recalled cars that have changed owners.

The Center for Auto Safety has been pushing regulators for years to hold auto companies to a standard of 90 percent, rather than the current average of 75 percent, said Clarence Ditlow, the Washington-based watchdog group’s executive director.

“The big problem with auto companies today in recall completion rates is lack of parts, not lack of social media campaigns,” Ditlow said.

One policy change that would make a difference is tying vehicle registration to completed recall repairs, Dowdall said. Such requirements are already in place in the U.K., where the completion rate is 92 percent. Germany can declare a car legally inoperable until a recall repair is performed.

NHTSA is working with three state departments of motor vehicles exploring a pilot project to bring the idea stateside, Rosekind said.

State motor vehicle officials have said they don’t have the money to track safety recalls and have opposed legislation that would require them to at least notify car owners of outstanding recalls when they register a vehicle.

“Without a doubt, automakers are employing different attitudes” after NHTSA laid down the challenge last year, Dowdall said.


Be the first to comment

Leave a Reply

Your email address will not be published.


*


Time limit is exhausted. Please reload CAPTCHA.