Insights from Sedgwick's Report Shed Light on the Growing Trend of Auto Recalls in the First Quarter

Increase in Product Recalls Across Industries

The latest U.S. product recall index report from Sedgwick reveals a significant 14.2% increase in overall product recalls compared to the previous quarter. This surge marks the highest single-quarter total in four years. The automotive sector played a key role in driving this rise.

Automotive Recalls and Impact

Sedgwick's data for the first quarter indicates explicitly a 3.4% increase in automotive recalls in the U.S., with the number of events rising from 237 in Q4 2022 to 245 in Q1. Additionally, the report notes a slight increase in the number of impacted units, reaching 7.6 million.

Leading Cause and Implications

According to Sedgwick's separate communication to Auto Remarketing, electrical systems emerged as the primary cause of automotive recalls, accounting for 48 events and affecting the highest number of units recalled, with 1.68 million units linked to such issues.

Future Outlook and Industry Challenges

With three-quarters of the year remaining and growing regulatory and consumer scrutiny, Sedgwick warns of the possibility of surpassing 1 billion recalled units across all industries for the third consecutive year. Manufacturers face increasing risks, stricter regulatory enforcement, and a more publicized recall process. Adaptability and preparedness for changing rules and regulations will be crucial for businesses.

Sedgwick's Recall Index and Stakeholder Guidance

Published quarterly by Sedgwick's brand protection experts, the recall index aggregates and tracks recall data from various regulatory agencies and industries. Its purpose is to assist stakeholders in navigating the complex regulatory environment, managing product identities, and addressing market challenges effectively.

Increased Number of Consumer Claims Regarding Vehicles Sold with Open Safety Recalls

As many dealers already know, consumer claims regarding vehicles sold with open safety recalls have increased drastically in California in the past year. With the increase in overall recalls lately, Dealers should be extra careful to take all necessary steps to protect themselves from these types of potentially costly claims.