How Chinese Counterfeits Led to Aston Martin's Largest Recall Ever

It wouldn't be Aston Martin without international intrigue, and this recall has quite a bit.

Feb 9, 2014 at 10:18AM

Images
The hot Aston Martin Vanquish is just one of several models affected by a new recall. Photo credit: Aston Martin Lagonda Ltd.

"Drat. Moneypenny, tell 007 to get back to HQ straightaway. That blasted Aston Martin of his has been recalled -- again."

OK, so it's not a line that is likely to show up in a movie theater near you anytime soon. But James Bond's favorite supercar maker, Aston Martin, did announce a whopper of a recall this past week.

And in true 007 style, the story behind the recall includes a whiff of international intrigue.

A big recall for a tiny automaker
Here's the official word: Aston Martin is recalling 17,590 vehicles -- or about three-quarters of its total production since November 2007, including all of the cars sold in the U.S. over that time -- after discovering that the accelerator pedal arms in the affected cars could break.

Ho-hum, right? Automakers recall cars all the time. Not so fast: According to documents filed with the National Highway Traffic Safety Administration, or NHTSA, the Chinese supplier that made the part, Shenzhen Kexiang Mould Tool, was using "counterfeit" plastic material supplied by another Chinese firm, Synthetic Plastic Raw Material.

This follows two prior recalls of the same parts. Reports of broken throttle pedal arms had led Aston to initiate a recall back in May, and a second round in October. But after an Aston dealer reported that a replacement part broke while being installed, the company's engineers began digging deeper.

And that's where the international intrigue came in.

Counterfeit materials, slipped in on the sly
I'll let Aston Martin's own words speak for themselves. Here's what the company's letter to the NHTSA said:

Aston Martin's engineering specification requires pedal arms to be made of PA6 material supplied by DuPont. Initial tests on the failed pedal arm have shown that [the supplier] used counterfeit material, which was received in bags labelled as DuPont PA6 material.

Tests reveal that the failed pedal arm was made from material consistent with PA6.6 material, rather than DuPont PA6 as specified in our drawing specification.

What's that mean? It means that the company that supplied the material put a cheaper, less durable plastic in bags labeled "DuPont PA6" -- and sold them to the company that made the parts for Aston Martin. 

Not surprisingly, that cheaper material developed a tendency to break.

Aston is rushing to contain more than one kind of damage
Aston told the NHTSA that DuPont is delivering the correct material to the Chinese manufacturer directly. And DuPont and Aston Martin representatives "will be physically present in China to supervise the production of all pedal arms," the company said.

They'll get it right this time no matter what, in other words. 

Aston Martin also says that it's going to switch to a U.K.-based manufacturer for the parts as soon as possible. 

That may be a move made for marketing purposes as much as quality purposes: Nobody who paid six figures for an Aston Martin wants to hear that his or her beloved car is being recalled because of a cheap plastic Chinese part.

But the damage on that front might already be done.

How much will this cost, and can Aston afford the bill?
Aston Martin said on Thursday that the cost of the recall would be around 1.5 million pounds, or about $2.45 million. 

That sounds cheap, but for Aston, costs can add up quickly. Unlike most of its peers, Aston Martin doesn't have the backing of a major global automaker. Aston used to be owned by Ford (NYSE:F) -- and much of its technology, including its current engines, started as hand-me-downs from other parts of Ford's global empire -- but it was sold in 2007.

Aston recently cut a deal with Daimler (NASDAQOTH:DDAIF) to supply a new range of engines, a deal that gives Daimler a small stake in Aston Martin, but Daimler isn't a financial backer of Aston. (At least not yet.) 

At the moment, Aston Martin is owned by a group of private-equity investors. How deep are those investors' pockets? It's unclear. That makes a major recall something of a concern.

Fortunately, it sounds like even a run of 17,590 plastic parts won't be a budget-buster for Aston Martin. The recalls will be a bit of a headache, but I suspect Aston's dealers won't mind, as these things have a way of leading to a little extra service work. "Sir, is there anything else we can attend to with the car while we're taking care of the recall?" 

The larger cost to Aston Martin might be the ding to its reputation. I don't mean its quality reputation -- at least not exactly. Nobody (at least nobody who knows anything about high-end British cars) expects an Aston Martin to be flawlessly reliable. 

But the hint that Aston might have been trying to save a buck (er, a pound) by using a Chinese supplier won't play well. And of course, the fact that the Chinese supplier was using counterfeit material to make the parts won't be popular, either.

The upshot: Aston has some work to do
The reality, though, is that this will probably blow over quickly -- at least in the short term. Some well-heeled customers will howl, but they'll be placated. 

The bigger question is this: Will those customers come back in a few years for another Aston Martin? Or will they remember "cheap Chinese parts" and choose a Porsche or Ferrari next time?

Hard to say. But I suspect that Aston Martin will need to convince more than a few concerned customers that they've learned a lesson from this experience, and that there will be no more counterfeit parts in its very pretty, very expensive cars.

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John Rosevear no longer owns the Aston Martin he bought during a not-so-brief moment of insanity many years ago, but he still owns shares of Ford. You can connect with him on Twitter at @jrosevearThe Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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