Laguna Hills, CA, May 9, 2024 — In its seventh “State of Recalls” report, Recall Masters, the automotive industry’s leading provider of recall solutions, revealed that more than 33.6 million affected passenger vehicles and light trucks/vans were accounted for in recalls mandated by the National Highway Traffic Safety Administration (NHTSA) in calendar year 2023. Another estimated 239 “voluntary manufacturer notice” campaigns affected an unknown number of vehicles.

To clarify, since these “voluntary campaigns” are not yet identified as formal NHTSA recalls, data points such as number of affected vehicles does not require public disclosure. While many vehicles have more than one defect present, the 2023 total of 394 NHTSA campaigns adds to the growing recall crisis. Taking into account unrepaired vehicles from previous years, the tally translates to more than one in four vehicles on US roads with at least one open recall. With an estimated 278.8 million registered vehicles in the country, the threat to drivers and passengers remains high despite the overall decrease in reported defects.

To date, the State of Recalls is the only annual report to publish data about voluntary manufacturer notices. While many incorrectly assume these notices do not pose risk the same risk to drivers as formal NHTSA recall campaigns, data suggest otherwise. Deploying its risk-scoring methodology, Recall Masters identified 56 of the 239 voluntary recalls deemed “high risk” to consumer safety.  Due to limited public visibility of these voluntary recalls, there is almost no verifiable number of vehicles affected. Many of these voluntary campaigns could end up as formal NHTSA recalls, however, with a gap in time between reporting a defect and the investigations that follow, vehicle owners are left vulnerable. Recall Masters tracks a vast number of these notices, but not all of them, as manufacturers are not required by law to disclose beyond NHTSA’s oversight. As vehicles add new technology, it’s become more difficult for NHTSA to keep up with the volume and complexity of investigations.

“This report brings to light the growing number of NHTSA campaigns across all vehicle system defects, though we are concerned about the astronomical growth in the software and electronics sector,” explains Scott Alan, President and CEO at Recall Masters, a California-based data and technology company that connects dealerships and OEMs with owners of vehicles affected by a dangerous recall. “As vehicles become more like computers than machines, it’s only conceivable that there would be related software errors and failing electronic components.  Software and electronics are evident in almost all vehicle operation, safety and infotainment.  We’ve crossed that divide and there’s really no turning back, especially as BEV and hybrids become more prevalent.  Despite the enormity of campaigns and affected vehicles, U.S. traffic deaths fell 3.6% last year and dealerships have completing recall repairs at an impressive pace.”

For the automotive industry, 2023 posed some unique challenges, beginning with a dismal economy and slow sales due to rising interest rates.  The stumbling new car sales picture coincides with the return of robust manufacturing, forcing dealerships to carry more inventory likely to sit longer on lots. Consumers continue to hold onto their vehicles for a longer period of time.  In year’s past, when inventory was low, consumers paid exorbitant amounts for older vehicles, though at more reasonable financing.  Approximately 35.9 million pre-owned vehicles exchanged hands in 2023, down from 36.3 million in 2022.  Individuals who are not the original owner are typically beyond the reach of OEM outreach for the purposes of recall notification. Those out-of-warranty older vehicles generally are appealing to dealers looking to increase profitable Customer Pay (CP) revenue.

“With dealerships struggling with new vehicle sales volume, all eyes will turn to fixed operations to shoulder more of the revenue requirements,” explains Sean Reyes, Chief Marketing Officer at Recall Masters. “Recalls present not only an opportunity for dealerships to win back vehicle owners who have defected to the aftermarket, but to also strengthen relationships with customers they hope to retain and to reduce costly customer acquisition expenses at a time with every dollar matters.  Retail auto repair has steadily eaten into dealership revenue, but recalls can only be repaired by an authorized dealership of that brand.  In more recent times and with slowed vehicle sales, dealership service departments have leveraged recall activity to bolster warranty revenue.  In the U.S., 49 state legislatures have laws that require the OEM to reimburse dealerships for recall repairs at retail rates for both parts and labor.  That increased activity is reflected in higher recall completion rates, but there’s still so many more owners to help.  Every dealer has their eyes open with regard to recalls.”

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Sean Reyes
Chief Marketing Officer
949.246.6023
sean@recallmasters.com

For the purposes of this document, the term “recall” includes NHTSA-mandated recalls and an unaudited list of TSBs, defects and any other voluntary manufacturer notices that are issued by the manufacturer as part of an effort to inform consumers, dealerships and other entities that may own the affected vehicle. The use of the word “recall” should not be interpreted as a formal notice of a recall, either from the manufacturer or NHTSA. This summary is based on the available data collected by Recall Masters and is not a thorough accounting of all affected vehicles for 2023. Data is not authenticated by an independent firm.