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July 18, 2016
www.usedcarnews.com
Recalls Keep Cars Out of Wholesale Market
STILL ROLLING IN: This 2002 Acura TL is among the vehicles being urgently recalled by Honda due to the potential for its Takata airbag to rupture. The latest recall includes: 2001-02 Civics and Accords; 2002 CR-Vs and Odysseys; 2002-2003 TLs; and 2003 Acura CLs and Honda Pilots.
By Ted Craig
The urgent warning adds to the growing backlog of vehicles that are out of the market. Manheim economist Tom Webb said there were a “significant number of vehicles that can’t be sold� at auction due to recalls. These delays are costing consignors the chance to sell at a fairly high price. Wholesale prices as measured by the Manheim Used Vehicle Value Index are at their highest level in more than four years, and off less than 2 percent from the record high reached in May 2011. “I know everybody would rather have these vehicles fixed and avail-
able, but that’s just not possible,� Webb said. Anil Goyal, senior vice president of automotive valuation and analytics for Black Book, said the Takata recalls won’t affect any one brand’s value. However, rate of repair could affect the overall market. “The airbag recall is widespread across many different brands, which means any material effect on depreciation will be impacted more by the volume of recalled vehicles coming back into market at any one time, as well as the demand for those vehicles, and it’s difficult to predict this cadence and appetite at this time,� Goyal said.
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The Takata airbag recall became even worse as Honda recalled more than 300,000 vehicles, all more than a decade old. New test data on a particular subset of defective Takata air bag inflators in certain 2001-2003 Honda and Acura vehicles show a far higher risk of ruptures during air bag deployment. This has prompted an urgent call from the National Highway Traffic Safety Administration to ensure that unrepaired vehicles are found and fixed before they cause further injuries or fatalities.
Ruptures are far more likely in inflators in vehicles that have spent significant periods of time in areas of high absolute humidity—particularly Florida, Texas, other parts of the Gulf Coast, and Southern California. Testing of the inflators from these vehicles shows rupture rates as high as 50 percent in a laboratory setting. The vehicles in question were recalled between 2008 and 2011. Honda has reported that more than 70 percent of this higher-risk population of vehicles has already been repaired, but approximately 313,000 vehicles with this very dangerous defect remain unrepaired.
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