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Trade agreements and consumer behaviour are shaping the future of automotive recalls

Brexit negotiations were firmly in the headlines in late December, with European leaders working to reach agreements on the movement of goods throughout the continent from the beginning of this month.

On 24 December, the European Automobile Manufacturers’ Association (ACEA) issued a statement saying it welcomed the deal struck between the EU and the UK on future trading relations, noting that the agreement allowed the sector to avoid the negative impact of a no-deal Brexit.

The structure of the automotive industry is incredibly complex. Its supply chain spans the continent which requires a great deal of collaboration between OEMs and those who make up the aftercare market. While the ACEA welcomed the deal, it also said it was still too early to make a full assessment until after all technical details had been made public.

Both Germany and the UK had vested interests in a positive outcome with around one in every seven cars sold in the UK manufactured in Germany. The news that tariff-free trade can continue will see thousands of jobs protected.

What our readers will be keen to understand is whether this will have any impact on recall trends – something we will cover in detail in our upcoming State of the Nation annual insights report, due for publication in February. As it stands, we know that automotive recalls are down, and much like most other industries in 2020, this is largely as a result of COVID-19.

The pandemic has disrupted mobility, with consumers spending more time at home than on the road. That said, those who preferred to take the train or car share are no longer doing so because of risk of infection.

In its recent mobility report (December 2020), McKinsey said that micromobility and the use of bicycles is expected to increase by 5 per cent and shared micromobility by 3 per cent post-pandemic. Digital sales are also set to play a leading role in the car buying experience with more than 80 per cent already using this method – and only a third of 18-34 year olds expect to buy their next vehicle at the dealership.

We have been talking about these changes for some time, but it appears as though the pandemic has sped up this transition. This will of course alter the way in which automotive manufacturers manage and execute recalls.

Cars will be delivered to the purchaser’s door and not the dealership, therefore the expectation will be that if a recall is to take place, the manufacturer or dealership should collect the vehicle from the residence.

This is where Sedgwick's brand protection experts come in, with our ability to handle the process from door to door, removing the need for customers to make a trip to a showroom or specialist garage for essential works to be done. In a time when everything and anything can be delivered to your door, it is by no means unthinkable that a car owner would expect this level of service – particularly for a high-value commodity.

We will go into this in more detail in our State of the Nation report. Until then, to learn more about the rise and fall of recall trends and to acquire knowledge about how to plan for one, download our latest insight guide:

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