AutoNation: We Won't Sell Recalled Cars Without Fixing Them First

September 10, 2015

The world is full of very strange people, and CEOs are no exception. Many top executives seem to focus so much of their energy inward, they're unwilling or unable to read the writing on the outer walls of their lush, gilded bubbles.  

Mike Jackson, Chairman, CEO, and President of AutoNation is different.

Jackson has clearly been reading headlines for the past year-and-a-half -- headlines about General Motors' "Switchgate" fiasco, Takata's endless waves of airbag recalls, and the constant editorials, press conferences, and congressional hearings concerning recalled cars.

Jackson knows that the public is worried about flawed vehicles, and he's watched as his competitors in the used car business have clumsily balked at having to repair recalled vehicles themselves. He also knows that lawmakers at the state and federal levels are trying to close the loopholes that allow used car dealerships to sell vehicles with open recalls.

In other words, Jackson knows that change is in the air. Yesterday, he and AutoNation tried to meet that change head-on:

"AutoNation, Inc...America's largest automotive retailer, today announced a policy to not sell, lease or wholesale any new or used vehicle that has an open safety recall. This will apply to every one of AutoNation's 293 vehicle franchises across the United States and stands as a confirmation of the company's commitment to delivering a peerless customer experience."

Which is great, but let's not kid ourselves. AutoNation isn't doing this just because it's the right thing to do. It also make AutoNation look like "the good guys", while some of its competitors are still grousing about costs and caveat emptor. In notes to the press, AutoNation gave the move its proper spin: 

"There's no way to expect that customers would or should know of every safety recall on every vehicle they might purchase, so we will ensure that our vehicles have all recalls completed," said Mike Jackson, Chairman, CEO and President of AutoNation. "We make it our responsibility as a retailer to identify those vehicles and remove them from the market until their safety issues have been addressed."

A blanket commitment not to sell vehicles subject to a safety recall is not without cost, as adequate parts are not always immediately available, and AutoNation must hold the vehicles in inventory until they are repaired. The company insists that their customers' protection is worth the investment in the process. They believe that the decision to do so is ultimately the right one, and economic considerations must take a back seat to safety concerns. [emphasis ours]

AutoNation says that the new policy will identify recalled vehicles and pull them from the sales floor until they're fixed. The company also promises that it won't get around the policy by wholesaling recalled vehicles either.

No matter the rationale -- whether it's "the right thing to do" from a moral perspective or a marketing one, or both -- the payoff for customers is nice. Not only will buyers know that they're getting a vehicle that's had recall issues addressed, but AutoNation says that shoppers will still be able to trade in unrepaired, recalled vehicles without being penalized. Not bad. 

The question is, though: will this policy pay off with consumers? Knowing this, would you make AutoNation your first stop when you're shopping for your next car? Sound off in the comments below.

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