Toyota recall October 2010: Lots of recalls. Better cars?

This is the year of the auto recall. From Hondas to Toyotas, Hyundais, and even Bentleys, the United States reportedly is on track to see more cars recalled than in any year since 2004.

Cars are getting shoddier and highways are more dangerous, right?

No. Overall car quality actually went up in this year's quality survey by J.D. Power and Associates. And highway safety is better than ever in many ways.

So what do all these recalls signal? In an odd sort of way, they may be evidence that car companies are becoming more proactive than ever.

Many of the problems they're addressing are serious and, in some cases, life-threatening. But by moving quickly to address those problems, automakers are taking potential hazards off the roads before they lead to accidents.

"There's much more of a climate, if you will, of taking the bull by the horns," says Bill Visnic, senior editor with Edmunds.com, an automotive information firm in Santa Monica, Calif. "Once everybody saw the black eye that Toyota got [for its slow response to reports of safety hazards], all the carmakers have become much more vigilant."

Take the latest pair of recall announcements. On Wednesday, Toyota announced that it was recalling 1.5 million models worldwide because of brake fluid and fuel-pump problems. Nearly half of those vehicles were sold in the US, including Avalons, nonhybrid Highlanders, and Lexuses.

By mid-day Thursday, Honda announced it too would issue a recall for the same issue plaguing Toyota's US models: brake-fluid leaks that could cause the brakes to become spongy and soft over time.

Neither car company could point to any reports of injuries or fatalities related to the problem. Toyota needed no prodding to announce the recall, David Strickland, administrator of the National Highway Traffic Safety Administration (NHTSA), told Bloomberg Businessweek.Honda made public that it would recall certain 2005-2007 models of Acura RL sedans and Honda Odyssey minivans even before it knew how many vehicles were involved.

These recalls are simply the latest in a long line of vehicle recalls. In July, a Detroit News review of federal data found that the US was on a pace to recall more than 20 million vehicles this year, the most since a record 31 million were recalled six years ago.

"There are more recalls because cars are more complex," Mr. Visnic says. As manufacturers add more electronics and sensors, they find that these components can cause problems. But "cars are safer now than they've ever been."

Last year, highway fatalities fell to a six-decade low, even though there are five times more cars on the road today than in 1950. Highway fatality and injury rates were at record lows in 2009. This year is shaping up to be even safer, NHTSA's Mr. Strickland said last month.

Although recalls can be the right thing to burnish a reputation in the long run, they can be devastating in the short term.

"No manufacturer likes to have bad news coming out about a recall," says Raffi Festekjian, director of US automotive research at J.D. Power. "So you're going to take a hit."

After widespread criticism of its slow response to reports of unintended acceleration last year, Toyota's reputation for quality plummeted from 6th in 2009 to 21st in 2010, according to J.D. Power's annual quality survey. That was the Japanese carmaker's lowest ranking ever in the study's 24 years.

But the company has worked to fix the quality problems it identified and continues to investigate the sudden-acceleration reports.

Earlier this month, Toyota announced that its dealers had fixed more than 5 million problems in the three key recalls of late 2009 and early 2010: sticking accelerator pedals, floor mats that could jam accelerator pedals, and antilock brake systems (ABS) that didn't brake quickly enough under certain circumstances. It said it had also tested some 4,200 vehicles in its investigation of sudden-acceleration problems.

"It's definitely the right thing to do to take a proactive approach," says Mr. Festekjian. "You have to earn the trust of consumers."