Leading Indian automaker Maruti Suzuki is the latest entrant in the “Recall Club,” joining distinguished names that include Toyota, Honda, Peugeot Citroen and, more recently, Hyundai. All these brands have recently recalled one or more models in various markets around the world. In India, Maruti Suzuki recalled 100,000 A-Star models, owing to a faulty fuel tank part. Its stock tumbled to a six-month low, and A-star owners are anxiously linking regular car issues like poor mileage and pickup to a possibility of fault with their cars, even if theirs isn’t part of the recall.
While recalls have generally been regarded as a sign of a responsible automaker, this time it’s a little different. Both investors and consumers seem to be overanxious, likely because caution and nervousness (even about short-term losses) is a lingering effect of the recession and also because of the frequency with which some big and highly trusted brands are joining the recall phenomenon.
Given the fragile state of consumer and investor confidence in today’s post-recession world order, brands will need to do worst-case-scenario planning even for actions that look logical and are in the consumer’s interest, and really step up communication efforts to make events like recalls more transparent so as to avoid stirring anxiety and speculation.
Photo Credit: http://www.marutisuzukiastar.com/
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Another Hyundai follow-up: There’s a reset happening in the U.S. car biz, caused by the financial/economic meltdown, the bankruptcies of GM and Chrysler, and even recent quality glitches from Toyota. A handful of brands are capitalizing on this reset, perhaps none more so than Hyundai, which is winning awards, gaining share and garnering more media attention. Hyundai wants the world to know this, so it created 
