Parts Makers, Vehicle Manufacturers Not Prepared To Meet TREAD Act Compliance

Autoparts Report, Dec 4, 2002

According to the results of a recent survey released by West Coast-based automotive consultancy Syncata Corp., only eight percent of vehicle and equipment manufacturers are currently ready to comply with federal reporting regulations imposed under the Transportation Recall, Enhancement, Accountability and Documentation Act (TREAD). TREAD requires vehicle and equipment makers to submit reports summarizing information about consumer complaints as well as warranty, legal claims and field reports to the National Highway Traffic Safety Administration (NHTSA). The first reporting period begins April 1, 2003.

"Given the potential of TREAD to improve the safety of automobile travel by enhancing NHSTA's early warning detection capabilities, and given the value beyond compliance for manufacturers -- like better parts defect and warranty fraud detection -- the industry is surprisingly unprepared to meet the deadlines," said Marianne Grant, director of the Syncata business innovation center. "Organizations are now faced with a significant amount of work that must be done in a very short time frame to gather, categorize and summarize huge volumes of historical and ongoing data," Grant added.

More than a third of those surveyed said they had still not even identified a practical way to collect and categorize the prior three years worth of historical data necessary to meet the deadline. Other findings reveal over 40 percent have still not identified a means of continuously filing their quarterly reports and retaining and protecting the data. The first quarterly reports are due August 31, 2003. Historical reports are due September 30, 2003.

The majority of the respondents said their organizations do intend to leverage their TREAD data to achieve benefits beyond compliance, which in addition to providing earlier warning of parts defects and warranty fraud prevention could also result in improved workflow automation and better dealer service market oversight.

The survey was conducted at a recent Syncata TREAD Forum on Oct. 30, 2002 in Long Beach, Calif., which was attended by over 50 representatives from vehicle and equipment manufacturers. Representatives included legal, warranty and information technology executives.