Software-Related Vehicle Recall Analysis
Executive Summary
Automotive recalls can occur for a number of reasons. Traditionally, these reasons have been mechanical or electrical failings in the vehicle that would cause a significant safety hazard to the driver and occupants of the vehicle. However, in recent years more and more electronics are being put into automobiles. As a result, one would expect that a larger amount of recalls would also be attributed to suboptimal software in the vehicle. This document will show recall statistics for four different years (1999, 2003, 2006, & 2007) for twenty-nine different automobile manufacturers who sell their product in the US. These statistics were taken directly from the Office of Defects Investigation, a branch of National Highway Traffic Safety Administration.
Frequency Analysis
In previous years software-related automotive recalls were very low in number. In 1999, only 1% of the 115 vehicle recall campaigns made by the prominent consumer OEMs that sell vehicles in North America were a result of software defects. This number grew slightly in 2003, with percentage of software-related recalls rising two percentage points. 2006 saw a huge increase, with software-related recalls now accounting for 11% of all recall campaigns. In 2007 software-related recalls have remained at a similar raw count, but percentage-wise have dropped to 9% of all campaigns.In total, more than 1 million vehicles (1,150,718) were recalled for software-related defects during 2007.
Financial Analysis
Assuming each recall costs the OEM $45 per unit recalled[1], software-related recalls cost the major OEMs more than $50 million in 2007 alone. Since 2002, software-related recalls have affected 4.5 million vehicles (4,549,309) and cost the OEMs over $200 million ($204,718,905). The average software-related recall campaign during the 2002-2007 time span would cost an OEM $3.3 million and affect approximately 74,500 vehicles.
Conclusion
While software-related recalls have become much more frequent than years past, they still make up a minority of recalls. These types of recalls currently compose roughly 10% of all vehicle-related recalls, and one can expect that 2008 will show similar, if not higher, numbers. However as vehicle complexity increases, electronic devices will play more and more of a critical role in proper vehicle operation. This in turn will increase the prevalence of software-related recalls, and in the near future it is not unlikely that software-related recalls become the majority instead of the minority.
1999 Vehicles Recalls
2003 Vehicle Recalls
2006 Vehicle Recalls
2007 Vehicle Recalls
Appendix
In order to model financial implications, it was assumed that the OEM incurred a cost of $45 per vehicle recalled.However, high-level financial models were also created using the price points of $25, $65, and $85 per vehicle recalled.These high level models follow below.
$25 Per Vehicle Recalled
$45 Per Vehicle Recalled
$65 Per Vehicle Recalled
$85 Per Vehicle Recalled
[1] See Appendix for explanation
Share