OREANDA-NEWS. June 04, 2015. The Takata airbag recall is historic in both the number of vehicles and brands impacted, though there will be limited negative implications on the used vehicle values of the related vehicle brands and models, according to Black Book. Therefore, outstanding U.S. auto ABS transaction performance should remain largely unaffected, according to Fitch Ratings.

According to Anil Goyal, VP of Vehicle Valuation and Analytics, at Black Book, the recall impacts older vehicles from 2001-2008 across 11 manufacturers covering nearly 34 million vehicles. Despite the size and the breadth of the recalls, it is unlikely to have any significant impact on a specific brand or a vehicle's value. In addition, since the vehicles involved are over seven years old, the dollar impact on vehicle values will be minimal.

Black Book's analysis regarding recalls on 37.5 million vehicles in 2014, collateral data trends showed that recalls did not adversely impact normal retention patterns of a vehicle. Click here to download a copy of Black Book's white paper on recall risk analysis.

'http://www.blackbookauto.com/uploads/docs/bb-whitepaper-total-recall.pdf'

The size of the recall makes it uniquely complicated to execute and it may take years to complete. There are significant logistical issues in getting the new parts and operational issues in performing the repairs. The execution of the repairs may vary by brand and may become an important factor in a brand's reputation.

'Auto ABS pools are typically diversified across a range of models which should limit the potential impact on loss rates', according to Hylton Heard, Senior Director at Fitch. 'Further, most transactions are backed by recent vintage vehicles not affected by the recall.'

As shown in the report by Black Book, depreciation rates did not accelerate on models impacted by the vehicle recalls in the examples discussed. Thus, Fitch expects little adverse effect on used vehicle values overall, including residual values.

Vehicles recalled will be repaired at auto dealerships, with the cost borne by the specific auto manufacturers and Takata, and not passed onto outstanding auto ABS trusts. According to the National Highway Traffic Safety Administration (NHRSA), there are at least eight auto manufacturers that have issued vehicle recalls: BMW; Chrysler; Ford; Honda; Mazda; Nissan; Toyota; and Mitsubishi.