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Automotive companies across the world today face a very competitive and difficult marketplace. In an effort to stimulate growth, many automaker, particularly in the United States have resorted to steep discounts to compete. These price cuts, in addition to rising operating costs, have taken their toll on the profit margins in the industry. To counterbalance the downward trend of profit margins, all automakers are looking at creative ways to contain costs.
Warranty coverage is one of the fastest growing areas of operating costs in the automobile industry. In 2004, experts estimate warranty costs exceeded $45 billion worldwide. In the United States, auto warranties account for nearly 41 percent of all warranty costs across the entire economy. And, for the first time, in 2004 the number of recalled vehicles exceeded the total number of manufactured vehicles.
One of the causes behind the rising warranty costs and claims is the increasing complexity of vehicles. Today, nearly 40 percent of the value in an average vehicle is tied up in its software and electrical systems. A single car may have as many as 70 different processors, controlling everything from anti-lock brakes and automatic transmissions to cruise control and fuel injection. Failures to those embedded systems account for a third of all warranty claims.
Controlling the costs of warranties has big benefits. Currently, warranty costs drag down profits of automobile industry by 3 percent. If automakers could reduce their warranty costs in half, they would see their profits soar as much as 300 percent.
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Hmmm.... not really convinced about the electronics thing. I'd have thought the (small) cost to the manufacturer of replacing electronic components would be more than offset by the ridiculous overpricing of these same components to non-warranteed customers, and the preumature scrapping of vehicles due to this overpricing.
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Are vehicles more reliable? Yes...
Are ALL the vehicles more reliable? Well, no...
There's a new saying among Germans which came up just recently: "Nothing breaks down like a brand new Mercedes-Benz".
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I am the only Pole over here.
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These stats are American arn't they? As I understand it, a lot of recalls is the US are to correct things that could remotely cause the sort of incident that an American sues for. For instance, I remember some Audis were recalled in the US to cure 'unintended accelaration'. I don't think they were recalled for this in Europe. Especially as the cure was an extended US style brake pedal...
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If you instal a cruise control system which is permanently live with no fusing or realy control, you get a fire if anything goes wrong. Ford engineers please note this is kindergarten stuff!
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THE ASSOCIATED PRESS
WASHINGTON -- Ford Motor Co. on Wednesday recalled 3.8 million pickup trucks and sport utility vehicles for a cruise control switch suspected of causing engine fires. It is the fifth-largest auto industry recall in U.S. history.
Ford said the recall of 1994-2002 model-year vehicles includes the company's hot-selling F-150 pickup truck, Ford Expedition, Lincoln Navigator and Ford Bronco. The company said it would start sending out recall notices to vehicle owners immediately.
The National Highway Traffic Safety Administration and the No. 2 U.S.-based automaker have been investigating complaints of engine fires linked to the switch.
Toyota Motor Co., meanwhile, recalled 978,000 sport utility vehicles and pickup trucks amid concerns about the power steering system. The affected vehicles include the 1990-95 4Runner SUV, 1989-95 truck 4WD and 1993-98 T-100 pickup.
Toyota said a rod linking the steering wheel and the wheels could fracture under conditions where the steering wheel is turned while the vehicle is stopped. Owners will be notified beginning in mid-September, the company said.
In the Ford case, NHTSA has received more than 550 complaints of engine fires from the cruise control switch. There have been allegations of three deaths in cases cited in news reports or lawsuits in Iowa, Georgia and Arkansas.
The affected vehicles include: 1994-2002 model F-150s, 1997-2002 Expeditions, 1998-2002 Navigators and 1994-96 Broncos equipped with factory-installed speed control.
"We have a solution that fixes the problem, and we're confident that this is going to be the right remedy," said Ford spokeswoman Kristen Kinley.
Ford said its inquiry found that brake fluid could leak through the cruise control's deactivation switch into the system's electrical components, leading to potential corrosion. The corrosion could lead to a buildup of electrical current, which could cause overheating and a fire.
Dealers will install a fused wiring harness to act as a circuit breaker in the system. The company said the harness would cut off electrical current to the switch if the current increases.
The concerns about the engine fires led to a recall in January of nearly 800,000 vehicles from the 2000 model year.
tinyurl.com/bfa5t
madf
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