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Stout | Automotive Recall Accelerator, September 2021

Stout’s Automotive Recall Accelerator brings together unique and important news, analysis, and insights related to automotive recall and vehicle safety for stakeholders across the industry.

RECENT DEVELOPMENTS

In early 2020, a fuel pump recall was issued due to cracking from prolonged exposure to solvents during manufacturing which affected five vehicle manufacturers. Since the initial recalls, there have been at least two expansions of those recalls (highlighted in Stout’s April Automotive Accelerator). In July 2021, another vehicle manufacturer expanded its recall to include an additional 165,000 vehicles, with many of the manufacturer’s vehicle platforms now affected by the recall. To date, this recall has affected over 4.4 million vehicles. See below for a recent defect description and links to related documents.

  • “The affected vehicles may be equipped with a low-pressure fuel pump produced during a specific timeframe that may include an impeller which has been manufactured with a lower density. If the surface of the lower density impeller is exposed to solvent drying for longer periods of time, it may develop fine cracks. These cracks may lead to excessive fuel absorption, resulting in impeller deformation. Over time, the impeller may become deformed enough to interfere with the body of the fuel pump, potentially causing the low-pressure fuel pump to become inoperative. For included vehicle models where longer solvent drying time has not been identified as a cause, functionality of the fuel pump controller (FPC) combined with a lower density impeller may lower the resistance to interference between the impeller and the body of the fuel pump, potentially causing the low pressure fuel pump to become inoperative.”
  • Chronology for this recall
  • The Part 573 submission for this recall

We continue to see examples of vehicle manufacturers proactively testing vehicles for defects and issuing recalls prior to the reporting of any field events (e.g., deaths, injuries, warranty claims, etc.). In one recent example, a vehicle manufacturer identified that that the windshield may not be properly attached to the vehicle in its post-production testing and issued a recall for nearly 20,000 2020-2021 model year vehicles.

  • “On June 16, 2021, based on testing and analysis, [Vehicle Manufacturer] found the urethane sealant was not performing as designed and affected units may not meet the requirements of FMVSS 571.212.”
  • “A windshield that is not adequately retained to the vehicle in a crash may increase the risk of injury to the occupants.”
  • The Part 573 submission for this recall

The National Highway Traffic Safety Administration (NHTSA) launched its annual “Drive Sober or Get Pulled Over” campaign, which runs from August 18th to September 6th. NHTSA is collaborating with Mothers Against Drunk Driving (MADD), the Governors’ Highway Safety Association (GHSA), Carolinas Medical Center and the Tempe, Arizona Police Department to spread awareness about the dangers of impaired driving. This campaign provides “…increased messaging about impaired driving and increased law enforcement presence.”

  • “According to NHTSA data, 10,142 people were killed in motor vehicle crashes in 2019 that involved an alcohol-impaired driver. On average, more than 10,000 people were killed each year form 2015-2019. That is one life lost every 52 minutes. All road users are at risk. In 2019, an estimated 13 percent of fatal pedestrian crashes involved a drunk driver.”
  • U.S. DOT Launches “Drive Sober or Get Pulled Over” Labor Day High-Visibility Enforcement Campaign

In August, the National Highway Traffic Safety Administration (NHTSA) denied a petition for inconsequential noncompliance involving Lamps, Reflective Devices and Associated Equipment (Federal Motor Vehicle Safety Standard (FMVSS) No. 108) for approximately 12,475 2016-2017 model year vehicles. The noncompliance involves the vehicle’s parking lamp which may be incorrectly programmed to produce increased light. The vehicle manufacturer filed this petition for inconsequential noncompliance in 2016.

  • “[The vehicle manufacturer] explains that the noncompliance is that the software in the subject vehicles’ parking lamp’s electronic control unit (ECU) was programmed incorrectly, causing the ECU to misinterpret the signals from the vehicle’s body control module (BCM). This results in a higher than expected light output that may exceed the maximum values permitted in paragraph S7.8.13 of FMVSS No. 108.”
  • The vehicle manufacturer included the following reasoning in support for this petition:
    • “The subject vehicles’ parking lamp-headlamp combination does not exceed the maximum permitted glare values for headlamps specified in FMVSS No. 108.”
    • “…the noncompliance has no impact on turn signal performance.”
    • “…the noncompliance will be addressed in the subject vehicles with a service update bulletin.”
  • NHTSA denied the vehicle manufacturer’s petition for inconsequential noncompliance indicating:
    • “[Vehicle manufacturer] argues that the noncompliance is inconsequential because the subject vehicles’ parking lamp-headlamp combination does not exceed the maximum permitted glare values for headlamps specified in FMVSS No. 108. While NHTSA agrees that the parking lamp-headlamp combination does not appear to exceed test points representing the vicinity of an oncoming driver’s eyellipse,…it is noteworthy that glare points are not distinctly defined in FMVSS No. 108.”
    • “While [vehicle manufacturer] argues that extinguishing the parking lamp on the side of the vehicle with the active turn signal prevents impairment of the performance of the activated turn signal, NHTSA does not find this compelling because extinguishing the parking lamp violates the steady burning requirement of FMVSS No. 108.”
    • “NHTSA notes that a manufacturer’s decision to conduct a service campaign is not a substitute for conducting a recall since consumers will neither be notified of the noncompliance nor informed to return to the dealership for a free remedy.”
  • U.S. DOT Launches “Drive Sober or Get Pulled Over” Labor Day High- Visibility Enforcement Campaign

INSIGHTS

The Governors Highway Safety Association (GHSA) commissioned a study to identify recommendations to advance racial equity in highway safety.

In August, Warranty Week shared data about three Asian vehicle manufacturers (Tata, Hyundai and Kia) with the highest recall warranty expenses between 2016 and 2020. Within the last years’ worth of data (2019-2020), Tata and Hyundai’s warranty claims expense decreased by 15% and 13%, respectively, while Kia’s warranty claims expense slightly increased. Regarding warranty claims rates (which compares total warranty claims to total revenues), Tata’s claims rate decreased from 3.9% to 3.4% and Hyundai’s claims rate decreased from 2.7% to 2.4%, while Kia’s claims rate slightly increased to 3.2%. Warranty Week and the vehicle manufacturers have correlated the high warranty expenses to:

  • Tata’s high warranty expenses is likely generated from its Jaguar Land Rover luxury brands.
  • “Hyundai blamed it on an engine recall. ‘During the year ended December 31, 2020, the Group has reflected [the] effect of new information and longer period of historical claim data in the measurement of warranty provisions in relation to the recall of theta 2 and other engines.’”
  • “Kia included similar language in its latest annual report: ‘During the year ended December 31, 2020, the Group reflected the effects of changes in accounting estimates, of which derived from the new information and recall experiences…in sales warranty provisions.’”
  • Top Asian Automaker Warranty Expenses
  • For more information about the theta engine recalls:

AUTHORS:

  • Neil Steinkamp, Managing Director | nsteinkamp@stout.com
  • Glenn Sheets, Managing Director | gsheets@stout.com
  • Robert Levine, Director | rlevine@stout.com
  • Raymond Roth, III, Director | rroth@stout.com

Compliments of Stout – a member of the EACCNY.