Consumers may shoulder costs of frequent recalls, says Fiat CEO

Article by Christian A., on May 22, 2014

Fiat Chrysler chief executive Sergio Marchionne remarked that consumers could be made to pay costs linked to handling recalls if the current pace and volume of callbacks become the norm. Vehicle recalls are costing the auto industry billions of dollars annually, and 2014 seems becoming one of the most expensive years for callbacks.

GM took a $1.3-billion charge to cover the cost of recalling vehicles – including the 2.6 million vehicles with faulty ignition switches – in the first quarter of 2014. The carmaker said it may take a $400-million charge to cover recalls in the second quarter.

GM recalled more than 2.6 million vehicles this week in the United States, which means that it has so far recalled 13.8 million US units this year. Marchionne remarked that the cost of frequent recalls would be transferred over onto the selling price of the vehicle, adding that carmakers will become more prudent in handling vehicle defects.

He disclosed that Chrysler has already commenced a review of its recall processes with the help of outside consultants. He quipped that while Chrysler’s vehicle recall committee and the work done by its technical staff are already world-class, they would improve it if they could.

The US Department of Transportation has imposed a $35-million fine against GM -- the maximum allowable -- for delaying the recall of small cars with faulty ignition switches.

Marchionne quipped that the fines will have little impact on how carmakers handle recalls, noting that a brand’s image or reputation is more at stake when recalls are issued. [source: automotive news - sub. required]

If you liked the article, share on:

Topics: fiat, ceo, recall

Comments

Recommended

Automakers that have teamed up with Formula 1, like Mercedes-AMG, develop the coolest road-going supercars just like the Project One. Aston Martin and Red Bull, on the other hand, have...
by - January 15, 2018
There is nothing more exciting happening this month than the 2018 Tokyo Auto Salon - especially with all the concepts that are being uncovered. Apart from the Toyota GR Super...
by - January 15, 2018
The very first time we ever saw Bentley’s SUV, the Bentayga, was back in September 2015 when it came out with the impressive W12 engine. A year after that, it...
by - January 15, 2018
For those who are expecting to see the mid-engine Chevrolet Corvette at the 2018 North American International Auto Show, we have got some bad news for you as it seems...
by - January 15, 2018
McLaren will be offering customers of its Sports Series models more choices when it comes to customizations. The automaker has also upgraded its range of options. Undoubtedly, customers are sure...
by - January 13, 2018
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries