QUALITY MANAGEMENT BLOG

Car recalls as high as never before - why carmakers fail in quality management

For decades, car manufacturers were considered QM pioneers - first and foremost Toyota, the Japanese global corporation that is credited with the first successful QM measures back in the 1970s.

In the meantime, production processes and vehicle components have changed so much that the successful QM processes of yesteryear seem to have come to nothing. This is an important indication of how important it is to continuously adapt and actively develop quality management systems.

The numbers read frightening: In the past ten years, there have been about twice as many car recalls in the US automotive market as new car sales. A study by the Center of Automotive Management puts the recall rate at just above 200 percent. And the trend for the first half of 2021, which has been evaluated so far, shows no improvement. With a recall rate of as much as 227 percent, more than every second new car sold returns to the dealer's workshop shortly afterwards because the manufacturer has to change parts, carry out software updates or replace electronic components. The study further concludes that the Japanese manufacturers, such as Toyota, Honda and Mitsubishi, recall particularly frequently, but major manufacturers, such as Mercedes-Benz and General Motors, also come up with worrying recall rates.

QM systems barely keep pace with technical change and current production processes

The defects leading to the recalls are distributed fairly uniformly across all relevant vehicle assemblies. Occupant protection systems, the body and powertrains and engines lead the table, followed by vehicle electrics, brake systems and the chassis. Surprisingly, it is less often the software that needs overhauling, an indication that remote updates now work well for all premium manufacturers. In all other areas, however, the QM systems that have been tried and tested for years seem to be failing across the board. There is no other explanation for such a consistent deterioration in product quality. Of course, global competition with the resulting cost pressure is a major argument for the lack of quality in new vehicles. There is also the marketing aspect: never before have the intervals between new car model launches been shorter than at present. If you look at manufacturers such as BMW or Mercedes-Benz on the European market, it is difficult even for car fans to keep track of new car launches. In addition, there is of course the pressure on manufacturers to develop e-drive vehicles in addition to new combustion engines for the traditional market and to make large engineering capacities available for this purpose.

The main reasons for the decline in quality are the same for all manufacturers

The study by the Center of Automotive Management identifies major reasons for the qualitative problems that plague manufacturers. These apply to most manufacturers to the same extent and contradict the serious quality management that the automotive industry once stood for. Globalisation, faster model changes for marketing reasons and the compulsion to think in economically shorter circles are the meta-causes that have a direct impact on production processes. Here are important strategic mistakes that have crept in among manufacturers:

  • "Banana development"
    Whereas in the past the motto was to only sell products that were really "mature" and where at most "teething troubles" were to be expected, the term "banana development" means that the product - just like the banana in the sea container - is first allowed to ripen at the customer's premises. Quality defects after the first day of sale are therefore consciously accepted.
  • Rapid instead of careful product development
    Marketing pressure has increased considerably. Manufacturers who want to keep up are no longer satisfied with a handful of functioning model series that are redesigned every five years. Moreover, every manufacturer is trying to keep up in all vehicle categories.
  • Lower margins on sales
    They have a direct impact on the choice of suppliers for production. Authorised dealers are hardly earning any money on car sales and are desperately trying to sell, even though there are hardly any returns to be made. In production, there is less and less reliance on components produced in-house.
  • Platform engineering
    In order to further reduce production costs, more and more relevant components are being installed in several vehicle types, although their specific requirements are very different. Thus, many of these components are used even though they are not exactly matched to the performance of the respective vehicle.

Conclusion: The increased recall rates among car manufacturers are a clear indication of how important it is to check technical innovations and changes to production processes with regard to QM standards before they are introduced. After all, recalls not only cost manufacturers a lot of money, but also loyal customers in the long run.

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