88% of Consumers More Aware of Recalls
Coinciding with the National Highway Traffic Safety Administration rolling out its new recall database, NADA Used Car Guide discovered results of its automaker recall perception survey showed an overwhelming majority of consumers are paying more attention to recalls today than in the past.
Based on an online survey conducted on NADAguides.com in response to the record-breaking number of vehicle recalls occurring during the first half of the year, 88 percent of respondents said they are more aware of recalls now than in the past.
NADA UCG’s survey also revealed that 71 percent of respondents held the opinion that recalls have grown substantially over the past few years. That sentiment is counter to NHTSA data that shows both the number of distinct recalls and vehicles involved have remained fairly consistent since the mid-1990s.
“Today, the public is receiving news of recalls in manners unlike ever before. Instead of people proactively accessing information, the media is ‘feeding’ reports to people through their Facebook news feed and tweets on their Twitter accounts,” NADA UCG analysts said.
“As such, it is possible that drivers are now being notified of recalls as they occur as opposed to actively paying more attention to them on their own,” they continued.
According to the survey, both the number of recalls issued and the seriousness of the safety defect influence future purchase decisions.
A sizable 44 percent of respondents agreed that regardless of problem severity, the more an automaker issued recalls, the less likely they would be to purchase one of their new or used vehicles down the road. Meanwhile 33 percent of participants were neutral and 23 percent disagreed.
However NADA UCG executive automotive analyst Jonathan Banks pointed out that consumer purchase behavior tells a different story. Banks referenced the turmoil General Motors encountered over the massive recall of older models with defective ignition switches.
"So far there's been only mild evidence to suggest that used GM prices are being affected by the recalls,” Banks said. “Chevrolet's used-car prices have been steadily gaining ground on the competition over the past few years, but we have noticed a relatively small 1-2 percentage point drop in this improving trend since April.”
By comparison, Banks noted, Toyota's price advantage over the competition fell by 20 percentage points within months of the automaker issuing a series of recalls related to unintended acceleration in 2009 and 2010. He suggested the timing of the two recalls likely had an effect on these price changes.
Banks pointed out that Toyota’s set of recalls was the first instance in which social media accelerated the spread of news.
“Consequently, this development in technology may actually be helping GM as the public has become increasingly desensitized from much of the ‘noise’ generated by the media,” Banks said. “Whereas the Toyota incident came first and was met with much astonishment, sequels rarely create as much buzz, with GM's recall being less shocking to the public in today’s digital world.”