Stricter safety means car prices could rise

2014 saw some of the past decade’s worst fallout when it came to lapsed automotive safety. GM’s vehicles all over the US were found to contain a faulty starter motor which could potentially turn off the engine and airbag function at horrific moments, leading to the deaths of some 40 people or more. Similarly, Takata airbags were found in over eight million cars that needed to be recalled, when it was discovered that in humid environments their casing could warp, leading to a potential explosion after an impact, leading to confirmed injuries and deaths of several people.

All in all, some 60 million cars were recalled in 2014. That’s more than double the previous record set back in 2004.

What are the regulators doing to stop this from happening again? They’re cracking down and cracking knuckles. The head of the NHTSA stepped down in order for someone with fresh blood to take over and he’s gunning for companies that don’t play by the rules and check that their products are safe. That’s leading to some gun-shy product suppliers, who don’t want to fall foul of the new safety chief, but also don’t want to have to face millions of dollars worth of recall costs. That in turn is making them much more intent on testing products to make sure they’re safe, which is a good thing, but it also means car part prices could be on the rise.

Bloomberg is reporting that several major Japanese car-part suppliers have announced new safety measures and checks in their production lines, which will lead to a surprising jump in part costs. Chances are those costs will eventually be passed on to the consumer, which could have a big knock on effect in the industry.


This may be something we need to get used to however, as with the ever increasing complexity of vehicles and the larger number of electrical components and smarter systems, the potential for problems rises.

“The risk of recalls will get even bigger in the future as cars use more and more electrical components and become more complicated,” said Satoru Takada, an auto analyst at Toward the Infinite World Inc. “The costs auto-parts makers pay to ensure safety will probably continue to rise.”

Of course some companies may try to ignore the extra safety checks and thereby undercut the competition, but where high-levels of product quality were once considered a badge of honour, or something that was exclusively for premium vehicles, with all of the problems that have shown up with certain parts in the past few years, car-makers just aren’t willing to buy from companies that haven’t jumped through every hoop.

What will be interesting to see is if the increased costs at the consumer end of the scale affect things much. When India recently announced higher safety standards for cars, auto-makers said it would drive customers away and would lead to a fall in overall car sales. While that hasn’t panned out just yet, it may do in the more Western markets.

Image sources: Wikipedia, Gerrit

    Jon Martindale

    Jon Martindale is an English author and journalist, who's written for a number of high-profile technology news outlets, covering everything from the latest hardware and software releases, to hacking scandals and online activism.

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