Recalls have surged, and independent brands should be wary of "new" problems when sales are soaring

With the help of new energy, the sales of mainland independent brands have risen rapidly, but with it, the number and number of recalls have soared.

According to the Notice on the Recall of Automobiles and Consumer Goods nationwide in 2021 issued by the State Administration for Market Regulation, in 2021, the mainland implemented a total of 232 car recalls, involving 8.736 million vehicles, an increase of 16.6% and 28.8% respectively. Among them, the recall of independent brands surged, with a total of 1.989 million recalls in that year, accounting for 22.77% of the total recalls. In 2020, the above two values of independent brands were 442,000 units and 6.6%, respectively. The reporter learned from the association that from the number of recalls last year, independent brands also increased by 31% to 38 times year-on-year.

Since the beginning of this year, the trend of independent brand recall growth has not changed. In the first two months of this year, there were 14 recalls in the domestic car market, recalling 1.589 million passenger cars, an increase of 128.6% year-on-year. Among them, the number of recalls of independent brands was 763,100 vehicles, accounting for nearly half of the total recalls.

Recalls of independent brands such as Wuling have climbed

Since last year, the number of recalls of Wuling and Baojun, which are widely defined as independent brands under SAIC-GM-Wuling, has climbed.

In 2021, SAIC-GM-Wuling recalled nearly 1.4567 million vehicles, accounting for 73% of the total recalls of its own brands that year. Among them, in July last year, SAIC-GM-Wuling filed a recall plan with the State Administration for Market Regulation and decided to recall a total of 1.437 million vehicles from August 2, 2021, including Baojun series, Wuling Zhiguang, Wuling Rongguang series, and Wuling Hongguang series models. The reason for this recall is that the spool of the forced ventilation valve of the engine crankcase of some vehicles is insufficient in wear resistance, and the oil consumption is accelerated after the wear of the spool, which may cause engine damage in extreme cases and there are safety hazards.

Almost the same plot also occurred in the first 2 months of this year's recall, SAIC-GM-Wuling accounted for nearly 80% of the total recall of independent brands with "single-handed strength".

In January this year, SAIC-GM-Wuling recalled some Wuling Hongguang S3 and new Wuling Hongguang S cars, totaling 610,000 vehicles. The reason for the recall is that some vehicles have oversized manual transmission parts, which will lead to insufficient gear retention, which may cause occasional dislocation of 6 gears under certain operating conditions. Off-gear refers to the car's transmission taking off from a certain gear and returning to neutral gear during driving. Off-gearing may cause the engine to stall, causing the vehicle to temporarily interrupt the power transmission, and in extreme cases, there may be a safety hazard. In addition, off-gearing can also cause damage to the gearbox.

In fact, the "3·15" party in 2020 has publicly named SAIC-GM-Wuling, saying that its Baojun 560 model has the problem of frequent stalls caused by transmission failures, and consumers have reported that the failure is still the same after replacing the gearbox many times.

In addition to SAIC-GM-Wuling, the recalled independent brands in 2021 also include BAIC BJEV, BAIC Senova, Jacques, Chery, FAW Besturn, BYD, Dongfeng Fengshen, Changan Automobile, Great Wall Euler, Xiaopeng Automobile, etc., of which BAIC BJEV plus the Gentry brand recalled more than 190,000 vehicles, ranking second. In the first two months of this year, independent brands Chery, FAW Besturn, Dongfeng Fengshen, and Jiangsu Jiulong issued recall announcements, of which Chery recalled Ariza 5 and Tiggo 7 for a total of 146,600 vehicles due to transmission problems, ranking second.

The relationship between the surge in recalls and quality control issues

In the general understanding of consumers, high recalls are often closely related to poor quality control, so does the surge in recalls of independent brands mean that quality problems are prominent?

Cui Dongshu, secretary general of the Association, told the first financial reporter that the recall reflects the quality control problem to a certain extent, but the active recall of independent brands is also a good embodiment of the improvement of normative awareness and responsible attitude. From the perspective of the number of recalls, in 2021, imported cars still occupy half of the country, although there are few complaints about imported cars, but the recall is well executed. From this point of view, there is still a gap between independent brands and the international level.

Automotive analyst Zhang Xiang said that recalls are generally divided into passive and active recalls. Passive recall is a consumer complaint to the relevant supervision department, a model of complaints may trigger the recall conditions, the State Administration of Market Supervision and Administration requires a mandatory recall of the model; if the car company finds that the vehicle has quality problems, it can also choose to actively recall. Whether it is an active or passive recall, car companies will only recall in the case of quality problems, so the recall is intrinsically related to quality control. He believes that the increase in the number of recalls of independent brands has objective factors, such as the increase in their sales.

Since last year, in the case of generally negative sales growth of joint venture brands, the sales of independent brands have achieved a relatively large increase. According to the data of the Association, nearly 8.3 million cars were sold by independent brands last year, an increase of more than 20% year-on-year. In the first two months of this year, independent brands sold more than 1.49 million cars, an increase of more than 12% year-on-year.

In 2019, the market share of independent brands was 37.8%, and in 2020, the data was reduced to 35.7%, and the total number of recalls of independent brands in that year was also reduced compared with 2019, with a total of 442,000 units, a year-on-year decrease of 28.4%. In 2021, the market share of independent brands directly increased by 5.5 percentage points to 41.2%, and in the first two months of this year, the market share of independent brands further increased to 44.8%, and the number of recalls increased with it.

SAIC-GM-Wuling, which accounts for the "largest head" in the recall of its own brands, has seen a good increase in sales in the same period, with sales of more than 1.76 million vehicles in 2021, an increase of 13.5% year-on-year, of which the Wuling brand sold nearly 1.45 million vehicles, an increase of 17% year-on-year. From January to February 2022, SAIC-GM-Wuling sold 176,000 units, up 11% year-on-year.

Encountered a "new" problem

A major weapon for independent brands to achieve "overtaking" is new energy vehicles. In 2021, new energy vehicles finally ushered in a real outbreak period. According to data from the Ministry of Industry and Information Technology, the production and sales of new energy vehicles in mainland China will exceed 3.5 million units in 2021, reaching 3.545 and 3.521 million units respectively, an increase of 1.6 times year-on-year, ranking first in the world for seven consecutive years. In the first two months of this year, the growth of new energy vehicles in the mainland continued, with production and sales of 820,000 units and 765,000 units respectively, up 1.6 times and 1.5 times year-on-year, respectively.

In the sales of new energy vehicles in the mainland, independent brands have obvious advantages. Last year, in the top 10 of the new energy vehicle sales list, only Tesla China's non-independent brand was shortlisted, ranking third, the top two are BYD and Wuling, in addition, Great Wall, GAC Aian, SAIC Passenger Cars, "Wei Xiaoli", Chery are on the list. In February this year, BYD also beat joint venture brands such as SAIC Volkswagen and SAIC-GM with high-volume new energy vehicles, and advanced to the second place in the total automobile sales list.

However, while independent brands have taken advantage of the rise of new energy vehicles, there have been significantly more recalls and complaints in this regard.

"After hard work, the mainland new energy automobile industry has achieved gratifying results, but the challenges are still severe, and like sales, the complaints and reports of new energy vehicles accepted by the market supervision department are also increasing day by day." Gan Lin, deputy director of the State Administration for Market Regulation, said.

According to the data released by the State Administration for Market Regulation, in 2021, there were a total of 59 domestic new energy vehicle recalls, an increase of 31.1%; involving 830,000 vehicles, an increase of 75.9% year-on-year, accounting for 9.5% of the total number of recalls in the whole year. Among them, from the perspective of defect clues, 3033 cases of new energy vehicle defect clues were reported, reflecting that power batteries, motors, and electronic control system problems accounted for 52.5% of the defect clues of new energy vehicles.

According to the reporter's statistics, many independent brands have had new energy vehicle recall cases last year, among which the quality problems related to power batteries are prominent.

In March 2021, BAIC BJEV recalled a total of 31,963 EX360 and EU400 vehicles. The reason is that there is a consistency difference between some EX360 and EU400 power batteries, and long-term continuous and frequent fast charging in a high temperature environment may lead to deterioration of battery cell performance, and in extreme cases, the risk of power battery fire will be caused.

In July 2021, Great Wall Motor recalled a total of 16,216 Euler IQ electric vehicles due to the difference in the consistency of some power batteries carried by the vehicles and the matching strategy of the BMS (Battery Management System) software. After a long period of continuous and frequent fast charging, the battery performance decreases, and in extreme cases, the thermal runaway of the power battery may occur.

Some new car-making forces are also recalled. In January 2021, following Weilai and Weima, Xiaopeng Automobile also recalled 13399 Xiaopeng G3s, because the tinned terminals connected to the copper row screws on the dc bus capacitor of the inverter may cause a short circuit between the positive and negative poles of HVDC due to the tin whiskers, the vehicle may not be able to start again when it is parked, and the vehicle in the driving state may cause the vehicle to lose power.

According to the "2021 National Consumer Association Acceptance of Complaints" released by the China Consumer Association, smart cars have become a new hot spot for complaints, the main problems are the safety of new energy vehicles; the battery quality problems are prominent; the mileage is shrinking; the promise is not fulfilled; and the price changes are controversial.

As for the reasons for the increase in recalls and complaints about new energy vehicles, Zhang Xiang told reporters that compared with traditional fuel vehicles, the development time of new energy vehicles is now shorter, and a new car can be launched in less than two years, and the verification experiment time is insufficient. In addition, new energy vehicles also have a lot of applications for new technologies, such as new vehicles, intelligent assisted driving, new electronic architecture, etc., these new things have trial and error problems, and they need to be gradually improved in the future.