On Tuesday, April 28, 2015, the National Highway Traffic Safety Administration (NHTSA) convened a one-day workshop with legislators, leading transportation officials, automotive industry representatives, safety advocates and researchers to identify approaches for raising low recall completion rates. Appearing on behalf of Honda was Bruce Smith, Senior Vice President, Parts, Service and Technical Division of American Honda. Following is Smith's statement.
Thank you for inviting Honda to participate in this important discussion. We appreciate the opportunity to share our insights into the recall process, including some of the challenges we have faced and the efforts we are making to improve recall repair rates.
Certainly, one catalyst for today's meeting is the massive, unprecedented industry-wide recalls and safety improvement campaigns related to Takata airbag inflators.
Regarding this issue, our priorities at Honda are centered on reaching owners of affected vehicles and urging them to contact an authorized dealer, increasing the supply of replacement inflators to accelerate the pace of repairs, and working with our dealers to ensure that we take good care of our customers.
We have asked dealers to expand service hours and to never turn away a customer with an affected vehicle. We have reminded dealers of our policy to provide affected customers with a loaner or rental car free of charge while their vehicle is being repaired. We require dealers to check the vehicle identification for every vehicle that comes into their dealership, and to support this policy, in February we initiated a new report that alerts dealers whenever their staff fail to check a vehicle identification number for an open recall.
We are open to new ideas that will help increase the rate of response to recall notifications. In fact, in the effort to increase completion rates we have already tried a number of tactics beyond the single required mailed notification.
For several years, we have provided multiple notices in both English and Spanish. We also have consulted with the U.S. Postal Service to try new methods to get people to open recall mailings, like a free calendar inserted with the recall notice to encourage customers to open the mailing. This didn't prove successful. But we have continued to try new things.
We have used overnight delivery of follow-up notifications, and we have contacted customers by phone. In support of the Takata inflator campaigns, we have called more than 1.5 million owners, targeting hard-to-reach customers, using both direct and automated calls. In fact, it is now our practice to use automated calls to alert customers in advance of mailed notifications.
In a further effort to increase the response rate to the Takata inflator recalls and SICs, earlier this year we began working with CARFAX, using its vehicle history data to improve our recall efforts, as well as adding open recall alerts to the CARFAX history for affected vehicles.
Honda also initiated a multi-million dollar voluntary advertising campaign in March as a strong call to action designed to grab the attention of customers to immediately check for open recalls and SICs. The advertising prioritized nine states and two U.S. territories that experience persistent heat and high absolute humidity.
It is too early to determine the impact of this advertising on recall completion. But I can tell you that, in combination with the mailed notifications and automated calls, the average daily traffic we experienced on our recall website increased by 225 percent during the 2-week ad campaign.
We also have begun using social media to communicate with customers in a targeted way – including contacting owners directly via Facebook. Placement of the aforementioned advertising on Facebook accounted for over half of the more than 200-thousand views of our recall website during the campaign. And with social media channels now a preferred method of communication for many customers this is a direction that will grow in the future.
Due to the size of the campaigns to replace Takata inflators, we also worked to increase the supply of replacement parts, and succeeded in securing three additional suppliers -- TRW, Daicel and Autoliv -- that are now supplying us with inflators. This will help accelerate the pace of repairs in the coming months.
Further, to prevent the possibility that an affected Takata airbag inflator can be used as a replacement part, we've been searching salvage yards nationwide to find and secure recalled inflators. We have already identified over 20,000 inflators that will never be installed in another vehicle.
Finally, within today's general discussion about recalls, I would like to focus on one specific area regarding older cars where the customer is generally the second or third owner of a vehicle.
We recently analyzed 14 different campaigns with a combined volume of more than 8 million vehicles. And where we see completion rates of up to 80 percent for vehicles in the first year of ownership, we found that the percentage declines with each year, to about 33 percent in the 9th and 10th year of ownership.
To amplify this point, let me explain that we have enlisted a special investigative firm as part of our effort to contact hard-to-reach owners of older model vehicles affected by the Takata airbag inflator recall. On a number of occasions, the investigators succeeded in locating the owner, but despite best efforts to persuade them, the customer refused to bring in their car for repair.
We also conducted a survey of more than 7,000 affected customers to better understand why they did not respond to our recall notice. We verified that 92 percent of the addresses were correct, yet, only 75 percent acknowledged receiving the mailing. When asked why they didn't complete the repair, 60 percent of the owners gave one of three reasons. They said they didn't consider the issue important enough, they weren't aware of the recall, or they had just received the mailing - even though the notification was delivered weeks before the survey. Importantly, we offered each owner to set up an appointment for the repair, but more than 50 percent declined the offer.
This challenge is one reason we support legislation that would make it a requirement that open recalls related to safety issues be addressed before allowing the vehicle to complete registration. This simple step would greatly reduce the risk of injuries related to unrepaired older model vehicles.
It is not just that manufacturers could be held responsible for incidents that occur with older model vehicles. Passengers and other vehicles on the road may be at risk from an unrepaired defect. So, it should not be simply a matter of customer choice as to whether or not they repair a vehicle with a safety defect.
Even as we look at new, long-term solutions to improve recall completions, we remain focused on the needs of our customers today. And we are fully mobilized on the effort to complete the recalls and safety improvement campaigns associated with Takata airbag inflators.
Again, we appreciate the efforts of NHTSA to look for ways to improve the recall process. And I thank you for your attention.