Record Car Recalls by GM, Chrysler Have Silver Lining for Dealers

Jul 25, 2014 11:05 AM EDT | Jordan Ecarma

The U.S. auto industry's record year of recalls for millions of potentially faulty vehicles may have a silver lining.

Dealers around the country for General Motors, Chrysler and other brands have enjoyed boosted sales from the customers brought in for recall repairs, Reuters reported.

"In many cases these are customers we haven't seen in a long time or have never met before," Robbie Long, service director for Raymond Chevrolet, outside of Chicago, told Reuters.

Automakers have recalled around 40 million vehicles in the U.S. this year, far surpassing the 2004 record of around 33 million.

While the problems that resulted in the recalls are unfortunate, the hundreds of customers coming in as well as the repairs paid for by GM have been good for the dealership, Long said.

Two other GM dealerships have seen sales rise by 13 percent and 20 percent, respectively, as of July, while Reuters interviews across the country showed that recalls had similarly boosted sales.

"Aside from the bad publicity, which is never fun, we welcome recalls," Don Lee, president of Lee Auto Malls in Maine, told Reuters.

GM has had beyond bad publicity this year following the recall of around 2.6 million small cars linked to tragedy. Ignition switch problems that apparently surfaced about a decade ago led to 54 crashes and at least 13 deaths in GM vehicles including the Chevrolet Cobalt.

The recall gives dealers several opportunities to do business with customers, according to Reuters. First, the problematic part is repaired, a cost of about $250 for the infamous faulty ignition switch in the Cobalt. Recall costs as well as loaner car transportation for affected customers are covered by GM. Dealers can also cash in when customers decide to buy new cars or have other services and repair work on their vehicles.

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