As technology increases in prevalence in people’s daily lives,
the number of advanced applications are increasing in our
vehicles. Technology has inherent risks and failures that are
deemed unavoidable. Luxury vehicles typically incorporate
more technology than non-luxury vehicles, but consumers
believe that luxury brands are of higher quality than nonluxury
brands. There appears to be a fundamental disconnect
between the perceived quality of luxury vehicles and the
failures associated with technologies incorporated in them.
This study seeks to examine the effect of technology
penetration on vehicle recalls and assess whether luxury
status moderates this effect. To address the question, I use
secondary data from Ward’s Automotive on US-produced
sedans from 2003-2011 and run panel regressions to test the
hypotheses. My results show that technology options appear
to have no impact on vehicle recalls, and that luxury status
appears to moderate the relationship between recalls and
Does New Technology Impact Product Recalls? An Empirical Examination in the Automotive Indutry.
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