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ADS Warns Of Systemic Breakdown In Automotive Customer Engagement Strategy Amid Rising Missed Recalls
Data experts at ADS have highlighted a growing issue in the automotive industry, where a failure to address recalled vehicles is causing reputational risks for dealers and leading to significant financial losses. This situation is described as a "lose-lose" scenario, with millions in potential revenue being missed due to unrectified recalls.
The problem is exacerbated by poor customer database management, insufficient OEM support for franchise dealers, and disconnected data systems. These issues are compounded by a cultural oversight that fails to link more workshop appointments with business growth. As service intervals lengthen and electric vehicles (EVs) require less maintenance, workshops are seeing fewer cars, further impacting revenue.
ADS has revealed that over 3.2 million recalled vehicles remain unrectified, posing safety risks. Data obtained under the Freedom of Information Act shows an increasing trend in unrectified recalls. The percentage of unrectified vehicles rose from 17.72% in 2018 to 28.74% in 2023, despite stable recall numbers.
{TABLE_X}Franchise dealers face reputational damage if they cannot manage recall rectifications efficiently. Jon Sheard, Operations Director at ADS, stated: "Although franchise dealers are the customer’s main point of contact for recall rectification, some of the frictions and inefficiencies they face represent a systemic failure in the wider industry’s appreciation of customer engagement and retention."
Recalls present opportunities for additional workshop business like servicing and MOTs. They also allow sales staff to discuss future purchases with customers. ADS is working with dealers to identify friction points in the recall process and improve efficiency.
The risk extends beyond financial losses; unrectified vehicles could lead to tragic outcomes affecting brands and dealer-customer relationships. Sheard added: "The risk of an unrectified vehicle leading to tragic consequences affects brands as well as their dealers, threatening relationships with customers throughout the industry."
Potential Future Challenges
If missed recalls become an MOT failure criterion, dealers could face reputational harm from an influx of dissatisfied customers without their cars. ADS analysis shows that each recall appointment generates an average of £309 in additional business, indicating over £120 million lost in 2023 alone due to missed recalls.
Sheard warned: "As recalls increase and EVs reduce routine workshop visits, this issue will only escalate. Dealers and OEMs who take the lead now, using improved data and better-connected systems, will be the ones who keep customers and revenue coming back."
ADS continues its mission to connect motor retail businesses with market data that enhances efficiency and revenue growth. By partnering with leading data providers, ADS aims to help dealers maintain strong customer relationships amid a rapidly changing market landscape.
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