Recalls are part of the car industry and generally are accepted by the public — unless perhaps they come in blocks of many hundreds of thousands at a time. Eventually brands are seen as having quality problems, and some portion of the auto-buying public gets skittish. It is not the sort of thing the industry needs as it goes into the critical autumn sales period, and when analysts grow concerned that with the aging of baby boomers, the pool of potential auto owners is dropping by the day. Two car companies known for quality have recalled more than 650,000 vehicles between them in just a few weeks.
Source: courtesy of Toyota Motor Corp.
The new Toyota Motor Corp. (NYSE: TM) recall includes 369,000 vehicles. About 200,000 are hybrid SUVs, including the high-end Lexus RX400h. Lexus often tops the lists of highest quality cars rated by research firms. The other large recall of cars are some more made by Toyota and affect its luxury brand — 169,000 Lexus GS350 and IS350 vehicles, due to engine assembly issues.
Two weeks ago, General Motors Co. (NYSE: GM) recalled nearly 293,000 Chevrolet Cruze models. In these, the power-assisted brakes can fail, which ought to make owners particularly nervous.
The irony of the recalls is that both nameplates are very highly rated in the new J.D. Power Initial Quality Study. Lexus is in third place and Chevy in fifth. Each rates well above the industry average and much better than Mercedes-Benz, BMW and Audi, the top-selling luxury imports.
The recalls cannot touch some of the largest ones in the recent past. Toyota’s recall of 8.1 million of its vehicles in early 2010 caused a formal investigation by the National Highway Traffic Safety Administration. Toyota CEO Akio Toyoda was hauled before Congress and ripped by several members who blamed the Japanese company for making dangerous cars that could kill or maim Americans.
Each time a driver has to take his or her car to a dealer and wait for a faulty part or assembly to be fixed, that brand’s quality perception is eroded. In a world with dozens of competitors, recalls are not something any of these companies can afford.
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