Auto recalls surge even as vehicle quality improves; industry faces new Canadian tariffs

The automotive industry is facing a seemingly contradictory trend: Vehicle quality is improving even as the number of recalls climbs toward record levels.

The development comes as automakers also prepare for new Canadian tariffs set to take effect at midnight, adding another layer of uncertainty for an industry already dealing with rising costs and shifting consumer demand.

Automotive expert Paul Eisenstein of Autoline TV said the number of vehicles recalled this year has surged, even as industry data indicates overall vehicle quality may be reaching historically high levels.

"We're seeing more recalls at the same time that we're seeing quality rise, so the question is, how can that be happening?" Eisenstein said.

Stellantis recently announced a recall affecting roughly 900,000 vehicles due to backup camera and software issues. Ford Motor Co., meanwhile, has recalled more than 20 million vehicles this year.

But Eisenstein said the increase in recalls does not necessarily mean vehicles are becoming less reliable.

A growing number of recalls involve electronics and software rather than traditional mechanical failures. In some cases, automakers can correct the problems through over-the-air software updates, allowing owners to receive a fix without taking their vehicle to a dealership.

"What's unusual is this is happening at the same time the data is coming out that says automotive quality may be at the highest level it's ever been," Eisenstein said.

Modern vehicles increasingly rely on complex computer systems controlling everything from infotainment and driver-assistance technology to cameras and other safety equipment.

That shift has created new opportunities for problems that can trigger recalls even when a vehicle's mechanical components are performing reliably.

At the same time, the industry is closely watching the potential impact of Canadian tariffs.

Because the North American automotive supply chain is highly integrated, vehicles and components can cross the U.S.-Canada border during the manufacturing process.

Higher costs associated with tariffs could ultimately be passed along to consumers.

"The people who are paying these tariffs are car buyers. That's a real problem," Eisenstein said.

Higher vehicle prices could also discourage consumers from purchasing new cars and trucks, potentially affecting production and employment throughout the industry.

Eisenstein said the combination of tariffs, higher prices and uncertainty surrounding vehicle sales could create a ripple effect across the automotive sector despite improvements in overall vehicle quality.

"The higher prices go, the worse sales will get," Eisenstein said. "The worse sales get, the more jobs we could lose."