MOTOR VEHICLE RECALLS: AN EXAMPLE OF PRODUCT DEVELOPMENT PROCESS FAILURE?
MOTOR VEHICLE RECALLS: AN EXAMPLE OF PRODUCT
DEVELOPMENT PROCESS FAILURE?
NICK OLIVER1, HILARY BATES2, MATTHIAS HOLWEG1 and MICHAEL LEWIS3
1
Judge Institute of Management, University of Cambridge, UK,
n.oliver@jims.cam.ac.uk, m.holweg@jims.cam.ac.uk
2
Warwick Business School, University of Warwick, UK, Hilary.Bates@wbs.ac.uk
3
School of Management, University of Bath, Bath BA2 7AY, UK, m.a.lewis@bath.ac.uk
ABSTRACT
This paper explores the relationship between trends in product development processes in the automotive industry and the post-launch problems that require car makers to recall vehicles for remedial work. The paper is based on a dataset of 23.1 million vehicles registered in the UK between 1992 and 2002. The data show that the incidence of vehicle recalls is increasing – between 1998 and 2002 there was an average of over 120 recall incidents per annum in the UK, compared to less than 50 per annum between 1992 and 1994.
Total numbers of vehicles recalled show no clear trend over time, but the absolute level of recalls year on year is very high: in the UK, 10.8 million vehicles were recalled during 19922002, representing 47% of all vehicle UK registrations in the period. There are substantial differences in recall rates between different car manufacturers, with European and American producers showing recall rates that are nearly three times greater than their East Asian counterparts. The paper explores possible relationship between these patterns and changes in product development practice, and suggests an agenda for further research in this area.
INTRODUCTION
The automotive industry is a ferociously competitive industry. Structurally, it suffers from long-term over-capacity, at least as far as vehicle assembly is concerned. In 2000, the installed global assembly capacity for motor vehicle production was 79.2 million units
(measured on the basis of two-shifts per day in the assembly plants) compared to global sales of 58.8
DEVELOPMENT PROCESS FAILURE?
NICK OLIVER1, HILARY BATES2, MATTHIAS HOLWEG1 and MICHAEL LEWIS3
1
Judge Institute of Management, University of Cambridge, UK,
n.oliver@jims.cam.ac.uk, m.holweg@jims.cam.ac.uk
2
Warwick Business School, University of Warwick, UK, Hilary.Bates@wbs.ac.uk
3
School of Management, University of Bath, Bath BA2 7AY, UK, m.a.lewis@bath.ac.uk
ABSTRACT
This paper explores the relationship between trends in product development processes in the automotive industry and the post-launch problems that require car makers to recall vehicles for remedial work. The paper is based on a dataset of 23.1 million vehicles registered in the UK between 1992 and 2002. The data show that the incidence of vehicle recalls is increasing – between 1998 and 2002 there was an average of over 120 recall incidents per annum in the UK, compared to less than 50 per annum between 1992 and 1994.
Total numbers of vehicles recalled show no clear trend over time, but the absolute level of recalls year on year is very high: in the UK, 10.8 million vehicles were recalled during 19922002, representing 47% of all vehicle UK registrations in the period. There are substantial differences in recall rates between different car manufacturers, with European and American producers showing recall rates that are nearly three times greater than their East Asian counterparts. The paper explores possible relationship between these patterns and changes in product development practice, and suggests an agenda for further research in this area.
INTRODUCTION
The automotive industry is a ferociously competitive industry. Structurally, it suffers from long-term over-capacity, at least as far as vehicle assembly is concerned. In 2000, the installed global assembly capacity for motor vehicle production was 79.2 million units
(measured on the basis of two-shifts per day in the assembly plants) compared to global sales of 58.8
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