CHRYSLER Corporation hopes that the third recall of its Neon subcompacts will be the last.
The automaker has been quietly fixing a potential brake problem affecting thousands of the new model, which was introduced in January. A screw holding the car's brake line in place could snap, allowing the hose to sag away from the body, where it could be snagged or severed.
Chrysler officials prefer to downplay the problem. But industry analysts caution that the Neon's image could be hurt if it develops the reputation of being problem-plagued.
Chrysler, however, is not alone. Honda also announced a recall last week affecting 191,000 Civics, del Sols, and Acura Integras. Last year, Honda actually recalled more cars than it built. And last week Nissan recalled 71,500 Maximas in the United States to replace possibly overly sensitive airbag sensors.
Increase in recalls
The industry as a whole has seen a steady increase in recalls in recent years. In 1993, 11 million cars and light trucks were called back for factory repairs, the largest number since 1977.
``The industry is recalling cars more aggressively than it used to and for much more trivial problems, stuff that once would have been swept under the rug,'' says auto analyst David Healy of S. G. Warburg & Co. in New York.
Automakers' willingness to face the negative publicity that accompanies a recall reflects the industry's increasing emphasis on customer satisfaction. So does the way many of today's recalls are handled.
Since the formal recall process began in the 1960s, the typical way to notify owners has been to mail an impersonal, standardized form letter advising them that they need to take their vehicle to a dealer for repairs. But when Chevrolet recently recalled its S-10 truck, it had its dealers make a phone call to schedule repairs at the convenience of the customer.
``That enabled a lot more in terms of direct communications with the customer,'' explains Chevy General Manager J. C. ``Jim'' Perkins.
The strategy had several payoffs. It increased the response rate to the recall campaign, which often drags on - a real danger in the case of a major safety defect. Chevy was able to repair as many vehicles in 90 days as it normally would have done in a year, if it had used the old method of contacting customers by mail.
But more importantly, it seems to have improved customer satisfaction, making owners feel like the car company actually cares.
``We have some data that shows that if you can handle a customer right with a problem, you actually get more owner satisfaction than if the customer didn't have a problem,'' says Tom Sidlick, vice president of Customer Satisfaction and Quality for Chrysler.Chrysler is rethinking its own approach to recalls. It expects to announce new, more ``customer-friendly'' policies later this month, based on the results of the recall of 18,000 Ram pickup trucks in January. The first 6,000 owners received the industry-norm recall letter. Another third were called by their dealers, offering to set up a convenient appointment. For the final third, the dealers not only called but also offered to pick up the cars and leave loaner vehicles while the work was being done.
That is the standard procedure for recalls at Toyota's Lexus luxury division, and industry analysts suggest it is one of the reasons why Lexus has consistently scored No. 1 on the prestigious J. D. Power Customer Satisfaction Index. ``They bent over so far backwards that customer satisfaction went up,'' says marketing consultant Chris Cedergren of the AutoPacific Group.
The casebook study of how to correctly handle a recall belongs to Saturn. When the radiators in 1,300 Saturn subcompacts were filled with defective and highly corrosive antifreeze, the division ordered a recall and replaced the vehicles free of charge.
Most consumers have come to realize that recalls are a normal part of the automotive business, ``so people generally shrug them off,'' Mr. Healy says.
But industry analysts caution that a recall is not an excuse for making mistakes in the basic design of a vehicle. No matter how well you handle a recall, it is still an inconvenience. If it happens repeatedly on the same vehicle, the owner will eventually get annoyed. In today's hotly competitive new car market, that is the quickest way to lose a future sale.