2). NHTSA Conducts Oversight of Safety Defect Recalls, and Other Selected Agencies Generally Share Similar Authorities

As part of its oversight role, NHTSA is responsible for reviewing auto  manufacturers’ planning and implementation of safety defect recalls to  ensure compliance with legal requirements. To this end, the agency is  responsible for reviewing, among other things, the manufacturer’s  description of vehicles affected by a safety defect, actions the  manufacturer plans take to remedy those vehicles through a recall, and  notification letters the manufacturer plans to send to owners of affected  vehicles. NHTSA also monitors the effectiveness of recall campaigns being  conducted by manufacturers based, in large part, on a manufacturer’s  quarterly reports showing the completion rate of a campaign. In addition,  the agency provides information and guidance to the public on recalls,  primarily through its Web site, www.safercar.gov. Foreign agencies we reviewed also generally had similar  authorities to NHTSA, with a few exceptions. Second, NHTSA oversees a manufacturer’s implementation of a safety  defect recall. Among other information, a recall notification  letter must include the following items:    an opening statement that states “This notice was sent to you in  accordance with the requirements of the National Traffic and Motor  Vehicle Safety Act”;   a clear description of the safety defect and the malfunction that may result    an evaluation of the risk to vehicle safety related to the defect;    a description of what a vehicle owner can do to get the defect remedied;    a statement of precautions, if any, a vehicle owner should take to reduce  the risk that the malfunction will occur before the defect is remedied;   a statement indicating that remedy work is free of any cost to the vehicle  owners, unless the manufacturer is exempt from providing it free of cost;  and   on the envelope of the notification letter, inclusion of the words  “SAFETY,” “RECALL,” and “NOTICE” in all capital letters and in a font size  that is larger than that used in the address information. Auto Industry Stakeholders Are Generally Satisfied with the Recall Process for Safety Defects, but Several Challenges May Affect Recall Completion Rates

Although industry stakeholders were generally satisfied with the recall  process for safety defects, certain challenges may affect the completion  rate of recalls. In  addition, we found five challenges that may affect the completion rate of  safety recalls:  identifying and notifying vehicle owners of auto safety defects,   motivating vehicle owners to comply with notification letters,    providing better information to vehicle owners and the public,    using existing data to improve completion rates of recall campaigns, and  lacking the authority to require manufacturers to notify used-car  dealerships of recalls and to require used-car dealerships to notify  potential buyers of the existing defect. Manufacturers Reported Clear Requirements and Open Communication as Benefits of NHTSA’s Role in the Recall Process for Safety Defects

Manufacturers we spoke with were generally satisfied with the recall  process for safety defects and stated that NHTSA’s role in this process is a  key benefit. Focus  group participants responded that they preferred letters that included  certain elements. the owner’s vehicle identification number (VIN) information. Providing Better Information to Vehicle Owners and the Public

Our focus groups revealed that many vehicle owners may not be familiar  with the Web site www.safercar.gov—NHTSA’s primary means of  communicating defect information to the public. However, the information NHTSA provides on its Web site could be more  useful. 3). 4). Using Data More Effectively

Although NHTSA uses manufacturer data to track the average annual  recall completion rate for all vehicle recall campaigns, NHTSA does not  currently use its data to conduct aggregate analyses of completion rates  across factors such as manufacturer, component, and vehicle type or by  analyzing completion rates based on the characteristics of the defect  notification letters, such as the format of the letter mailed to vehicle  owners. Enhancing NHTSA’s Recall Authorities

Legislation proposed in the 111th Congress, if enacted, would have  modified the authority NHTSA has to recall vehicles. Develop a plan to use the data it collects on recall campaigns to analyze  particular patterns or trends that may characterize successful recalls and  determine whether these represent best practices that could be used in  other recall campaigns. Our report  addresses the following questions: (1) What is the extent of NHTSA’s role  in the auto safety defect recall process, and how do its authorities  compare with those of other selected federal and foreign agencies with  safety recall authority? (2) What are the benefits and challenges of the  auto safety defect recall process for NHTSA and the manufacturers? To  compare NHTSA’s authorities with those of other federal agencies, we  reviewed legislation and interviewed officials at selected federal agencies  that, similar to NHTSA, have product safety oversight responsibilities,  including the Consumer Product Safety Commission (CPSC), U.S. Food  and Drug Administration (FDA), and U.S. Department of Agriculture  (USDA) to determine what differences and similarities exist between the  agencies’ recall authorities and those of NHTSA.
Why GAO Did This Study

In 2010, auto manufacturers recalled more vehicles than any other year, according to the National Highway Traffic Safety Administration (NHTSA), the federal oversight authority for vehicle recalls. However, many recalled vehicles are never fixed, posing a risk to vehicle operators, other drivers, and pedestrians. After the recent recalls of Toyota vehicles, Congress raised questions about the auto safety defect recall process, including the sufficiency of NHTSA's oversight authorities and whether vehicle owners are being effectively motivated to comply with recalls. In response, GAO reviewed laws and documents and interviewed NHTSA and stakeholders about the (1) extent of NHTSA's role in the recall process, and how its authorities compare to selected federal and foreign agencies that oversee recalls; (2) benefits and challenges of the recall process for NHTSA and manufacturers; and (3) options for improving the recall process. GAO also conducted focus groups with vehicle owners to better understand their perspectives.

What GAO Found

NHTSA monitors manufacturers' recall campaigns and completion rates (the number of defective vehicles that are fixed) and provides information and guidance to the public. NHTSA is responsible for reviewing the planning and implementation of recall campaigns to ensure compliance with legal requirements. To this end, the agency is responsible for reviewing, among other things, the manufacturer's description of vehicles affected by a safety defect, actions the manufacturer plans to take to remedy those vehicles through a recall, and notification letters the manufacturer plans to send to the vehicles' owners. NHTSA also monitors the effectiveness of manufacturers' recall campaigns, based in large part on the data manufacturers are required to submit on completion rates. In addition, the agency provides information and guidance to the public on recalls, primarily through its Web site. NHTSA generally has similar authorities to those of selected federal and foreign agencies GAO reviewed that oversee recalls--the Consumer Product Safety Commission, the Food and Drug Administration, the U.S. Department of Agriculture, and agencies in Canada, Germany, Japan and the United Kingdom--although some differences exist in how they can implement their authorities. Auto industry stakeholders are generally satisfied with the recall process, but several challenges may affect recall completion rates, and thus, the number of defective vehicles that are removed from the road. Manufacturers cited NHTSA's role in the process as a key benefit, reporting clear requirements and open communication. Although franchised dealerships had some concerns related to manufacturers' communication and availability of repair parts, they were also generally satisfied with how manufacturers reimbursed them. Nevertheless, NHTSA faces challenges that may affect recall completion rates; for example, focus group participants reported that 1) they preferred notification letters with certain elements and may be more likely to comply if the letters included the vehicle identification number (VIN) and clarified the severity of the defect and 2) they were unfamiliar with NHTSA's primary means of communicating defect information to the public--its Web site. Furthermore, according to GAO's review, although recall completion rates vary considerably by certain factors, NHTSA has not consistently used the data it collects to identify which factors make some recalls more successful than others. Finally, NHTSA does not have authority to notify potential used car buyers of a defect. Based on these challenges, NHTSA has the following and other options for improving the recall process and, more importantly, recall completion rates. First, NHTSA could modify the way manufacturers must present information in safety defect notification letters and publicize information resources, like NHTSA's Web site, so that vehicle owners are better motivated and informed. Second, NHTSA may be able to use manufacturers' data to identify what factors make some recalls more or less successful than others to better target monitoring of recall campaigns and identify best practices. Finally, expanding NHTSA's recall authorities may help identify more defective vehicles and improve recall completion rates.

What GAO Recommends

GAO recommends that NHTSA (1) modify requirements for notification letters; (2) enhance and publicize its Web site (3) better use manufacturers' data; and (4) seek legislative authority to notify potential used car buyers of recalls. NHTSA agreed to consider GAO's recommendations.