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So much for Toyota's vaunted reputation for quality. On July 18, the Japanese auto giant announced a recall of 418,570 vehicles worldwide for faulty engine parts. This follows an even larger global recall of nearly one million cars and trucks at the end of May for faulty parts that could cause drivers to lose control of the steering wheel.
The current recall affects about 150,000 cars sold outside of Japan, mainly in the U.S. and Canada, though no accidents have been reported due to the faulty engine component that could lead to oil leakage. In the U.S. more than 34,000 cars were recalled, including 26,200 Echo and 8,500 Prius models. While Toyota (TM) is no stranger to recalls—in May 2005 it recalled more than 750,000 pickup trucks and every single 2006 Toyota model line from the Avalon to the Tundra has experienced some form of recall—this latest round may finally dent its Teflon image if steps aren't taken to improve quality.
The high induced by the new car smell may indeed be increasingly undercut as recalls make headlines industrywide. Auto recalls can affect components of every type, from those as seemingly insignificant as tail-light bulbs to more considerable components, like those that led to the now infamous Ford-Firestone tire scandal. And 2006 has seen its share of high-profile recalls for both foreign and domestic auto companies.
Last week, Nissan (NSANY) announced a recall of Altimas and Sentras affecting 96,800 vehicles that were susceptible to engine fires due to excessive oil consumption. Up to 24 fires have been reported to the company.
In May, 31,000 units of the Chevrolet Corvette were recalled by General Motors (GM), because there was mounting evidence that some roofs could come unglued at high speeds.
Many recalls are preemptive, announced by the maker for unrealized but potentially disastrous consequences. Last month, for instance, Ford Motor's (F) Volvo division recalled 109,000 XC90 SUVs after engineers detected loosening ball-joints in the steering mechanism that could possibly break and make steering more difficult. However, no crashes or injuries had been reported.
TO THE DATABASE.
The National Highway Transportation Safety Administration (NHTSA) manages and tracks all U.S. recalls. It maintains an extensive, detailed database of all problems, which consumers can use to find out whether a vehicle they own or are considering buying has a recall associated with it. But, the system is not intended to help compare models, let alone predict problems based on past performance.
Some consumer-oriented publications also track recalls. Consumer Reports has a section devoted to recalls, but it covers consumer products beyond cars. Edmunds.com, the popular automotive online search site, just launched a safety-oriented section. But, like NHTSA's data, it is better suited to looking up information on a specific vehicle.
Organizations such as J.D. Power—which, like BusinessWeek.com, is owned by McGraw-Hill (MHP)—measure initial quality and consumer satisfaction, which does not take recall history into consideration.
BusinessWeek.com set out to examine which 2006 models have been recalled the most. Though the problems may range in severity, multiple recalls are a significant annoyance for consumers. In conjunction with Edmunds.com, we found that multiple recalls affected companies in nearly every vehicle segment and price point, from the proletarian Civic to the upscale Land Rover Range Rover Sport.
The ultimate gauge of the severity of recall issues at distinct manufacturers may remain out of reach. BusinessWeek.com contacted major analysts and auto-data tracking companies in an attempt to compare the number of vehicles recalled with the number of vehicles sold. But, because auto companies most often track sales by calendar dates and recall data is organized by model-year date (a 2006 Altima, for example, went on sale last year), direct comparison is not possible.
It is important to note that not all models in a recall may be affected. Cars are built in batches, and not all models of a recalled vehicle may suffer from the same faulty component. Moreover, as parts sharing has increased, recalls often encompass a variety of brands and vehicle types. One 292,000-unit recall due to faulty headlamps from a third-party supplier, Walnut (Calif.)-based Anzo USA, for instance, affects Hondas (HMC), Toyotas, Fords, and Chevrolets alike.
So consumers need to remain vigilant before, during, and after a purchase. Government crash surveys, as well as independent reliability and quality rankings, should still serve as the main guideposts for buyers. But, no doubt about it, recalls have crept into the buying equation.
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Editor's note: This is an updated version of a story that first appeared on July 17, 2006. It was updated to reflect the most recent Toyota recall.