Posted by: David Welch on March 2, 2010
Well, so much for racing through the gap left open by Toyota’s recall saga. General Motors said late Monday that it will recall 1.3 million compact cars to fix a power steering problem.
The timing is terrible. GM may have just benefitted from Toyota’s problems as the company’s sales rose 11.5% in February. The more important number is that sales for the four brands it is keeping —Buick, Cadillac, Chevrolet and GMC—rose 32% in the month. That’s a sign that GM found some buyers who might have shopped Toyota otherwise.
Keeping that momentum just got a little tougher. GM said that the company will start the recall following 1,100 complaints about the power steering in its small cars. GM is recalling the 2005 through 2010 Chevrolet Cobalt, 2007 through 2010 Pontiac G5, 2005 and 2006 Pontiac Pursuit sold in Canada and the 2005 and 2006 Pontiac G4 sold in Mexico.
The company can hope that its big recall will be lost in the shuffle of Toyota’s ongoing recall problems and the related government hearings. Toyota’s problems give all of its rivals a chance to prove that their cars are as good as, or better than Toyota’s models. Honda can make that claim. Its quality scores have been good for years. Hyundai and Ford have been making progress for several years, giving them a credible story. GM has been making headway with quality but still had a lot of work to do to convince consumers that its cars are just as good as those sold by Toyota.
At a time when recalls are big news, this is a set back. Recalls happen all the time and this one pales next to the 8 million cars Toyota has recalled recently. So, GM may still be able to take advantage of Toyota’s big stumble. At the least, consumers will view Toyota’s quality on a more even field with most other carmakers. But GM just gave the skeptical consumers that the company needs to win over a reason to believe that it hasn’t closed the quality gap.