CARY, N.C. – Even before the National Highway Traffic Safety Administration expanded the Takata airbag inflator recall earlier this month, several of the large publicly traded dealer groups were encountering the rippling impact observers such as Kelley Blue Book described.
Leaders from AutoNation, Asbury Automotive Group and Sonic Automotive each touched on how they’re handling the challenges of stop-sales preventing prime pieces of their used inventories from being turned as well as agitated customers calling their service departments inquiring when replacement parts would be available to complete repairs.
“Our thought process is this: If there’s a safety issue on a stop-sale car, we’re not going to retail it or wholesale it,” Sonic president and chief executive officer Scott Smith said when the group hosted its first-quarter conference call.
“We’re not going to go to sleep at night with that on our minds,” Smith said before trying to recall reports of a teenage girl who died when her airbag unexpectedly deployed during a minor accident.
“That’s not going to happen with us,” Smith added.
AutoNation chairman, chief executive officer and president Mike Jackson reiterated the policy the company has taken on recalled vehicles. Last September, AutoNation rolled out a strategy not to sell, lease or wholesale any new or used vehicle that has an open safety recall. AutoNation has since modified its position by sending some recalled units to auction.
“We can’t ignore the mother of all recalls here. Takata is a very difficult situation in that you have a safety device that in minor crashes is causing serious injury if not death, and there are tens of millions of vehicles involved,” Jackson said.
“On Takata, we’re in the early innings,” he continued. “We will adapt as best we can to manage this situation. I would say as far as retailing any vehicle with an open recall, that’s out of the question. We have started to auction vehicles with very clear disclosure, with stickers on the car that make it absolutely clear what’s open as far as a recall.
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