Recall

One of the more bedeviling problems for the automotive industry (and for manufacturers in general) is how to alert consumers to pending recalls, and getting consumers to comply with those recalls.  According to NHTSA, only 70% of recalled vehicles are repaired, even though such recalls are frequently safety-sensitive and repairs are free to consumers.

One of the provisions of the Fixing America’s Surface Transportation Act, or FAST Act, enacted in late 2015, aimed to improve those recall rates by involving state governments in the notification process, under a pilot program to be rolled out by the Department of Transportation (DOT).  The FAST Act authorized DOT to issue grants to state governments to carry out that pilot program.

The first recipient of those grants has recently been announced, with the DOT and NHTSA awarding a grant to the Maryland Department of Transportation Motor Vehicle Administration (MVA) to develop new methods of alerting vehicle owners of outstanding recalls.  The grant requires Maryland to provide a method of notifying vehicle owners of any open recalls when annual registration renewals are sent, and providing basic information about the defect and the nature of the recall.  By having the state provide this information in association with a mandatory re-registration process, the pilot program is intended to ensure that notification is not the weak point in the recall process.  The Maryland MVA has announced that it will begin providing these notifications in April 2018.

The program truly is a pilot at this point, with the state to provide an evaluation of the program after it has been in place for two years.  The FAST Act authorizes up to six states to receive such grants, so with luck, more data will be generated over the next few years as to whether state-supported recall notifications improve consumer response.