Recall first, ask questions later.
After Toyota Motor Corp. and General Motors Co. — two of the world’s largest carmakers — were criticized for dragging their feet on recalls of defective models in recent years, automakers have begun gearing up their responses to safety issues.
Recalls recently climbed to records in Japan and China, while the pace in the United States in 2014 is well ahead of last year’s, when the tally rose to the highest since 2004.
Toyota, roiled by a crisis over unintended acceleration in 2009 and 2010, on Wednesday issued its second-biggest recall announcement ever at a time when GM is also facing public ire for its handling of faulty ignition switches that have been tied to at least 13 deaths. U.S. regulators are probing GM over the way it dealt with flaws it first saw as far back as 2001 — a sign of the intensifying scrutiny that safety practices in the auto industry are now coming under.
“Since the Toyota fiasco in 2009 and 2010, there’s already been a tendency for automakers to be more cautious,” Ashvin Chotai, managing director of Intelligence Automotive Asia, said by telephone. “They are recalling when they previously wouldn’t have — that’s already occurring.”
Bank of America Corp.’s Merrill Lynch cut its rating on Toyota to neutral from buy and cited quality-related expenses among the reasons the carmaker’s quarterly earnings may trail previous estimates. Analyst Kei Nihonyanagi said Wednesday’s recall may reduce operating profit by about ¥70 billion ($686.5 million).
Regulators have drawn parallels between GM’s long-delayed actions and Toyota’s recall of 10 million vehicles for unintended acceleration more than four years ago. The company, based in the city of Toyota, Aichi Prefecture, admitted it had concealed information about those defects as part of a settlement with the U.S. Justice Department last month.
Toyota, the world’s largest automaker, recalled more than 6 million vehicles Wednesday for five potential safety hazards. The problems involved almost 30 models and included cables that could prevent air bags from deploying and windshield-wiper motors that may break down and cause brake lamps to stop working.
“We sincerely apologize to our customers for the inconvenience and concern brought by this recall announcement,” the company said Wednesday in an emailed statement. “Toyota has rededicated itself to strengthening its commitment to safety and quality. In part, that means refocusing on putting customers and people first, by listening better and taking appropriate action.”
Some of the 6.39 million vehicles Toyota recalled Wednesday are being called back for more than one fault, pushing the tally to 6.76 million. Several of Toyota’s top sellers — such as its Camry and Corolla sedans and RAV4 sport utility vehicles — were included in the recalls.
Total recalls in the U.S. this year through Wednesday have already exceeded 12 million — more than half of last year’s 22 million — according to the U.S. National Highway Traffic Safety Administration data.
Toyota surpassed 1 million recalled models in the U.S. this year even before Wednesday’s announcement, as had Nissan Motor Co. Honda Motor Co. is at about 900,000, while Chrysler Group LLC, after an April 2 recall of sport utility vehicles, is at about 738,000, according to the data.
The latest Toyota recall included 2.3 million vehicles in North America, 1.77 million of which were in the U.S., according to the company.
Last year’s U.S. recall tally was the most since 2004’s 30.8 million, according to NHTSA. In that year, GM recalled 10.7 million vehicles, including 3.66 million pickups for faulty tailgate support cables, according to the Center for Auto Safety.
This year, GM has already recalled more vehicles — 6.07 million — than any other automaker did in the U.S. in all of 2013 or 2012. Toyota recalled the most U.S. vehicles in each of the last two years — 5.29 million in 2013 and 5.33 million in 2012.
“It’s always better to err on the side of caution,” Jessica Caldwell, an analyst with car-shopping site Edmunds.com, said in an emailed statement. “Given the sensitivity around auto safety in the last five years, it should be no surprise that we see as many recalls as we do today.”
Wednesday’s recall by Toyota was smaller than the 7.43 million vehicles it called back in October 2012 to fix power-window switches. Ford Motor Co. called back more than 14 million vehicles in 2009 for a faulty cruise-control switch that could cause a fire, according to the U.S. Transportation Department’s website.
Carmakers often take years to recall vehicles. Toyota said it first identified one of the five problems in yesterday’s recall back in 2007. The one that came to light most recently emerged last year, it said.
Toyota last month admitted wrongdoing and agreed to an independent monitor who will assess its safety reporting practices as part of a $1.2 billion settlement related to its handling of unintended-acceleration problems. Attorney General Eric Holder said it was the largest criminal penalty ever imposed in the U.S. on an automaker.
For Akio Toyoda, president of the company and grandson of its founder, persistent recalls are a setback to his efforts to restore the company’s once-sterling reputation for quality. He’s pledged to improve and speed up the company’s processes, forming a global quality group that he chairs. The automaker said previous decision-making related to safety was too dependent on executives in Japan and that it has given regional operations more autonomy to make fixes.
Lawmakers last week brought up Toyota’s shortcomings during its unintended-acceleration crisis as they pressed GM Chief Executive Officer Mary Barra on the company’s handling of flawed ignition switches. The largest U.S. automaker is being fined $7,000 a day for failing to fully answer NHTSA’s questions about the flawed part in cars including the Chevrolet Cobalt.
Toyota and GM aren’t alone in facing challenges with cars in need of fixes. A surge in new models, increasingly complex technology and heightened regulatory scrutiny are behind the increase, according to a study released last month by financial advisory firm Stout Risius Ross Inc.
Automakers’ issues extend beyond the U.S. market. In Japan, auto recalls reached a record of almost 8 million vehicles in the fiscal year that ended March, the transport ministry said Wednesday. They climbed to a record in China after the country introduced its own recall laws.
The increasing use of standardized parts across vehicle lineups also raises the risk of larger recalls. Carmakers including Toyota also are pressing suppliers to make common components that they can put into various models.
Denso Corp., Japan’s largest parts maker, for example, has developed air-conditioner units that it says go into small compacts and larger luxury cars. Volkswagen AG, Europe’s biggest automaker, uses standardized components such as electronic systems and axles as part of its plan to base Audi, Skoda and Seat vehicles on a common platform it calls MQB.