How Could Automakers Survive In Era of Big Recalls

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Once again, GM is recalling its vehicles. 524000 cars has been called back due to a defect about airbags. Recently, another big automaker Toyota also recalled a substantial amount of cars, which is resulted from a safety problem as well. In recent years, it seems that the big scale of car recalling has become a common phenomenon in auto industry. It looks like the quality of their products is decreasing. However, this is not the case. According to Craig Trudell, Yuki Hagiwara and Ma Jie, three main factors lie behind this increase of recalls: more complex technology, heightened regulatory scrutiny and increasing use of standardized parts that can be commonly used in different models. (“Toyota-GM Seen Ushering Era of Big Recalls”) I totally agree with them. And as the carmakers are continuously creating new models and the technology is never perfect, I believe that recalls will be likely still inevitable in the future. So the question now is what those automakers could do to minimize the loss of recalls. In my view, the most important thing is to keep good communication with customers. Clearly telling customers what happened and what they should do helps companies eliminate customers’ feeling of doubt and worries. Thus it can keep firms from losing their “points of parity”, such as safety and reliability. And sometimes, carmakers might be able to improve their reputations by having an effective communication with customers because it could be a good chance to convey the company’s values to customers.

web links:

http://www.bloomberg.com/news/2014-04-09/toyota-gm-seen-ushering-in-era-of-big-recalls-as-scrutiny-mounts.html

http://money.cnn.com/2014/10/03/autos/gm-recall/index.html?iid=HP_Highlight

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