German multinational automakers, Volkswagen (VW) and Porsche are planning to recall more than 200,000 cars over a problem with the airbags and seatbelt pre-tensioners. The affected cars include the Tiguan, Sharan and CC models made in 2015 as well as Porsche 911, Boxter, Cayman and Panamera models from 2015 and 2016.

On Thursday, Germany-based newspaper Stuttgarter Zeitung cited the country’s KBA federal motor authority as saying the cars needed an update to the software of the airbag control units, Reuters reports.

Volkswagen then noted possible problems with airbags in some of the affected vehicles, adding that new software needs to be installed. According to the company, 227,000 VW and Porsche cars were affected.

Meanwhile, a spokesman for Porsche revealed that around 23,500 Porsche models could be affected by airbags or seatbelt pre-tensioners triggering even if the vehicle was not involved in an accident. The seatbelt pre-tensioner helps pull the bodies of the driver and front-seat passenger firmly to their seats in case of accidents.

Resurgent quality issues

A recall is issued when a manufacturer or government agency determines that a vehicle, any of its component or equipment creates an unreasonable safety risk to consumers or fails to meet minimum safety standards.

Vehicle recalls are not new. For years, carmakers have issued recalls of varying sizes, with most of the largest recalls being before the 21st century. But after decades of focus on vehicle quality, recalls are on the rise again in the auto industry.

In the United States, for example, the number of vehicle recalls has grown over the past 20 years to the point wherein 2016, the market experienced more than 1,000 vehicle recalls for the first time, a 2019 report by McKinsey & Company shows. In 2017, an average of 3.1 vehicles was recalled for each one sold.

The scale of each recall has grown as well, the report says. Before a major airbag recall in 2015, the average number of vehicles involved per recall rarely passed 30,000 units. But ever since, volumes peaked in 2016 at 90,000 vehicles for each incident and remained high in 2017 at 46,000 units.

Similar to this latest case, most automotive recalls since 2015 are based on issues concerning airbags and other critical safety-related components. Such problems account for up to 71 percent of the total units recalled, McKinsey added.

“As more companies move to modular designs and common product platforms and supply-chain partners, it becomes more likely that a defect on a single module or component can affect multiple vehicle platforms,” the report explained.

The overall effect according to the consulting group is that the complexity and reach of quality issues have increased. For instance, half of all recalls today affect more than one model and 14 percent affect more than one brand. This applies to the VW and Porsche issue as well, where up to seven models are affected.

The impacts of a recall

It is intuitive to know that recalls come with financial and reputational costs for automakers and suppliers. However, the impact of a recall will vary depending on the causes and circumstances surrounding it, McKinsey notes.

Several factors play important roles in recalls such as the possible effect on the safety and the health of the driver or passengers; the financial impact in terms of repair costs and fines; and the impact on a manufacturer’s brand.

If Volkswagen recalls its already circulated cars, it would most likely incur some losses. But the multinational company is believed to be capable of surviving the short term loses that come with product recalls. It could also easily compensate customers by replacing the defective auto parts.

“Overall, recalls may result in a variety of internal and external costs regardless of their severity,” the report said. This makes it “necessary to understand the main root causes behind associated quality issues and their implications about the company’s quality-management practices.”

Volkswagen AG, known internationally as the Volkswagen Group, is a German multinational automotive manufacturing company. The company sells passenger cars under the Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and other Volkswagen Commercial Vehicles.

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