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Car Dealers Courting Irrelevance

by Roger Lanctot | 8月 03, 2016

Steven Szakaly, chief economist of the National Automobile Dealer Association in the U.S., spoke at the Center for Automotive Research Management Briefing Seminar in Traverse City, Mich., yesterday calling for regular mandatory inspections of automated driving systems, according to Automotive News.  His choice of topic and his point of view suggested Trumpian tone-deafness to real challenges facing the automotive industry generally and dealers in particular.

Rather than take on the ongoing recall crisis and offer up a dealer-centric solution to solving the problem - the solving of which is guaranteed to boost dealer bottom lines AND vehicle sales - Szakaly called for mandated vehicle inspections.  The irony, of course, is that most future automated systems are likely to self-inspect in real-time.  Szakaly's plea reveals both his ignorance and NADA's impotence.

Szakaly must have missed the open letter sent last week by Senators Richard Blumenthal and Edward Markey to National Highway Traffic Safety Administration Administrator Mark Rosekind and Honda North America President & CEO Toshiaki Mikoshiba calling for the issuance of an immediate "do not drive" order for 2001-2003 Hondas.  According to NHTSA test data, Honda and Acura vehicles of that particular vintage show potentially fatal airbag rupture rates as high as 50% in crashes.

Blumental/Markey letter: http://tinyurl.com/hr2hogc

The Senators call for these vehicles to be removed from the road immediately before more people are killed.  To me, that sounds like a pretty unusually urgent demand and one worthy of attention.  Ten fatalities have already been confirmed as attributable to the airbag failures, according to NHTSA and the Senators.

The letter states:  "As Department of Transportation Secretary Foxx stated following the release of this news, 'Folks should not drive these vehicles unless they are going straight to a dealer to have them repaired immediately, free of charge.'  In the wake of this announcement, we expected Honda to echo the Secretary’s remarks and quickly follow-up with a “do not drive” instruction to owners of this subset of vehicles."

The letter continues:  "Additionally, we call on you to take additional measures to make it as easy as possible for owners of these vehicles to have this dangerous defect repaired, without having to drive the vehicle to a dealership. Considering NHTSA has directed consumers 'to not drive these vehicles,' we suggest Honda make available mobile mechanics who can travel to where an owner lives or works to conduct the necessary repair; or free towing to the closest repair facility, so that owners will not have to drive these high risk vehicles. As you know, there remains 313,000 vehicles with this very dangerous defect unrepaired, and we believe making such additional options available will be critical to achieving a 100 percent recall completion rate."

The Honda situation is not unique.  According to NHTSA data analyzed by J.D. Power through its SafetyIQ service, there are over 45M vehicles on U.S. roads that were the subject of safety recalls issued between 2013 and 2015 that are still un-remedied.  That figure represents nearly one out of every five cars on the road and excludes older vehicles.

NADA's response to this certifiable crisis has been to poo-poo NHTSA's nanny-state concerns. 

Speaking at NADA's annual gathering in Las Vegas earlier this year, incoming Association Chairman Jeff Carlson cautioned against legislation to require dealers to fix all recalls on used cars prior to sale.  He added, according to Automotive News, that such a move would ground millions of cars unnecessarily and diminish vehicle trade-in values, because only 6% of recalls are “hazardous,” citing a 2014 analysis by the Alliance of Automobile Manufacturers.  “Washington must understand that all recalls are not the same.”

I have to agree with Carlson.  All recalls are not the same.  But all recalls represent risky propositions jeopardizing the safety and security of the driving public.  News arrived just yesterday that the family of "Star Trek" actor Anton Yelchin was suing Fiat Chrysler for wrongful death as the result of a crash resulting from an un-remedied recall.

But instead of focusing on the real, bonafide and existing recall crisis, Szakaly called for an actual mandate to be applied at some future date to as yet nonexistent automated driving systems.  In spite of the critical role played by dealers in seeking out and repairing en-remedied recalls, instead of reaching out in solidarity to the auto manufacturer community, regulators and consumers to solve a current life-threatening problem on U.S. highways, Szakaly made a naked plea for the Government to force consumers to visit their dealers for hypothetical inspections of hypothetical automated driving systems.

This is merely the latest evidence that the automotive dealer segment of the automotive industry is quite simply its own worst enemy.  Dealers ought to stand for safety and security.  There's no need to create hysteria around un-inspected automated driving systems when flawed airbags and shifters are killing people today.

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