Ford's Big China Recall

Ford Motor (NYSE: F) has announced that it will recall 236,642 Focus cars in China, one of the largest  in the history of the People’s Republic. China is now the world’s largest vehicle market, and one of the most competitive, so quality reputation is critical.

This year may set a record for vehicle recalls around the world. The best known is a set of recalls by Toyota Motor (NYSE: TM) which eventually ran to more than eight million cars and trucks. GM, Honda, and Nissan have also had to bring in vehicles for repair, and the list of more modest-sized recalls includes almost every major car maker in the world.Ford’s problem in China is particularly tough. Its sales there are modest–well behind  GM, and VW. If Ford wants to match its success in the US, it has a tall mountain to climb. A very public problem with cars that stall, which is the problem with the Ford cars, will certainly hurt sales. The vehicles were made by a venture between Ford, Japan’s Mazda Motor Corp. and Chongqing Changan Automobile Co., according to Bloomberg.

The long list of recalls around the world means that although auto quality and manufacturing has advanced much over the years, the ability to make defect-cars has not. Many analysts blame this on the hardware and software complexity added to vehicles to make them easier to operate and safer to drive. The cost of those advances appears to be  more breakdowns of systems which have become as advanced as computers on small aircraft.

Ford’s China problem is bound to show up in quality ratings in China, if there is any systematic rating system there. The issue will certainly undermine the public’s perception of the quality of the company’s cars sold in the US.

Cars may run better than they have in the past, but it seems that they break down more readily as well.

Douglas A. McIntyre