Connected cars spell recall danger for manufacturers

Recalls of motor vehicles models posing a serious safety risk are at their highest since 2010, according to an analysis by international law firm Pinsent Masons.

Research conducted by the firm found that in 2014, 195 recalls for motor vehicle models were issued, more than at any point in the last five years.

Pinsent Masons says the increase demonstrates the increasing pressure on manufacturers to be proactive about dealing with vehicle problems, motivated by recent events in the US. Honda's record $70M (£46M) fine for inadequate reporting of fatalities, injuries and warranty claims has been one of a number of recent high profile cases which has left automakers sensitive to the reality that regulators are taking a stronger approach to enforcing penalties.

But with increased complexity being brought into vehicles as part of IoT, the future situation looks even riskier for car manufacturers.

Andrew Masterson, partner at Pinsent Masons, said: "Longer term, the move towards the development of connected cars with ever-more sophisticated components and technological complexity could yet make this process even more difficult. It will be a challenge but one the industry is well-placed to meet."

The recent increase in recalls is most marked in Germany, where 90 cases of unsafe vehicle models were identified by the region, up from just 3 in 2010, signalling a step change in the approach taken by the major German manufacturers, distributors and authorities. At the same time just 27 notifications for vehicle recalls were identified by the UK last year.

Pinsent Masons says that manufacturers will be working harder to mitigate the volume of product recalls in 2015.

Masterson explained: "Manufacturing and selling motor vehicles suffering from safety defects can have extensive reputational, financial and legal implications for automakers and their suppliers. Honda is a prime example; it's faced questioning for over 1,700 unreported death and injury claims and recalled more than five million vehicles in the US since 2008 as a result of faulty air bags made by Takata.

"Automotive manufacturers are aware that regulatory scrutiny is only going to get more intense, so they'll be looking at how they can further limit the number of vehicles which are found to pose a risk to consumers. A lot of recalls arise owing to problems with low value components of which inevitably there are very many in a typical vehicle. We can expect to see an increased focus on quality assurance especially in relation to sub-assembly suppliers as manufacturers look for better visibility over the quality and traceability of their sub-components.