Automobile Recalls - Product Failure or Strong Brand Ethics?

Published by MBA Skool Team, Published on August 12, 2013

Ford, Toyota, Honda, Chevrolet, Tata Motors, Maruti, Nissan.. And the list can go on and on. These are some of the most powerful and most-recognised brands which have become an integral part of the lives of millions of people across the world.

One of most competitive global industry which has penetration in almost every corner of the world is the automobile industry. The automobile sector is a high investment industry and companies have to constantly invest in research and development to stay ahead of competition. However, ultimately being a machine, despite all innovations and technological advances, there are cases of malfunctioning or technical snags in the best of cars. And such a scenario is one of the biggest management challenges and dilemmas for the company. There have been cases where companies have recalled over a million vehicles due to malfuntioning issues or technical snags. But the one question that rises in such a case is that is this a sign of brand failure or a stamp of strong ethics keeping customers as the king? 

When automobile giants order a gigantic recall of millions of cars, it causes a frenzy across the world. Automobile brands have over of the decades created an aura of perfection and innovation, and when the decision to recall cars is to be taken, it becomes a significant historical event in the life-line of that brand.


Big names like Toyota, Ford, Chevrolet, Honda, Volkswagen etc have all had incidents where they have had to recall millions of units for rectification and repairs.

A few of the recalls that have happened is listed below:


Everytime such a recall occurs, two aspects emerge out. It raises the question of brand credibility as to why such a huge brand fails. Why do automobile companies, with billions of dollars being invested in testing, research, safety etc, have severe issues at such a huge scale? Does this affect the brand image and the performance of the company? In the short term, recall of cars affects company sales, brand reputation etc as negative news about the brand do rounds in the media.


However, the other aspect is something which in the long-run adds value to the brand. When automobile companies take a decision to recall the cars on such a huge scale, they take a huge risk but it shows the strong foundation on which the companies ethics are laid down. In the long run, the company would gain the respect of its customers as it shows that the company holds the highest regard for its customers.


Recall of vehicles will always raise management dilemmas as it involves spending billions of dollars of recalling cars, correcting faulty issues and resending the cars. In the short term, recall decisions would always raise concerns of negative publicity and damage to brand image. However, in the long journey of a strong automobile brand, such an event would go down in history as a bold decision by the company where they have given the customers safety and needs maximum importance.

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