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Automakers on track to recall more vehicles than ever

Anyone who follows the news on regular basis would likely conclude that the number of recalls initiated by automakers over the last several years has jumped considerably. While they may base this conclusion on nothing more than the sheer volume of reports they have either read or watched, this is actually the reality.

Statistics show that during 1990s, automakers issued recalls involving 123 vehicles here in the U.S. and that this number jumped to 170 million during the 2000s. However, in just the first three years of the current decade, automakers have issued recalls affecting 63 million vehicles.

What then is behind this acceleration in recalls? 

According to experts, one of the primary reasons behind the recall spike is the fallout from the Toyota sudden acceleration debacle, which showed auto executives that the federal government is now more than willing to levy massive fines, and even pursue criminal prosecution for failing to report and remedy known auto defects.

Indeed, Toyota reached a settlement just last month in the criminal probe brought by the Justice Department, which alleged that the Japanese auto giant had both deceived consumers and failed to disclose the sometimes fatal sudden acceleration defect. The settlement consists primarily of a $1.2 billion fine payable to the federal government (in addition to the $1.6 billion Toyota agreed to earmark for settle civil suits).   

While Toyota's recent legal woes have played a large role in the recent spike in auto recall, experts say there are also other factors at work.

For instance, production globalization has resulted in more car models around the world sharing the same parts. As such, when the now increasingly zealous regulators in countries like Korea or China discover a motor vehicle defect, it triggers a recall not just in that country, but around the world.

Finally, experts theorize that the increase in auto recalls may be attributed to a greater sensitivity on the part of automakers as to how a defect -- especially an unreported one that causes serious personal injuries or wrongful deaths -- can damage a corporate reputation for years to come.

By means of illustration, they point to the troubles currently facing General Motors over its large-scale ignition switch recall, which documents have revealed the automaker had known about for several years before taking any sort of action.

It will be interesting to see if this trend continues. In the meantime, those who have suffered serious injuries or lost a loved one because of a dangerous or defective product should remember that they may have options for pursuing justice. 

Source: The Wall Street Journal, "Big car makers in race to recall," Neal Boudette and Hiroyuki Kachi, April 16, 2014

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