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Consumers' surprising reaction to GM's recalls

The Daily Ticker
The Daily Ticker
Daily Ticker

General Motors (GM) is recalling 218,000 older-generation Chevrolet cars in the U.S. for a potential fire hazard, just a day after announcing a recall of 2.42 million vehicles for issues ranging from safety lap belt cables to potential airbag problems. This week's safety recalls bring GM's total recalls to more than 15 million vehicles globally this year. The company announced that it expects the recalls to cost them $400 million this quarter, after taking a $1.3 billion charge in the first quarter.

Related: How to prevent the next massive auto recall

As GM tries to address all safety issues in the wake of the ignition-switch defect that has been associated with 13 deaths, its reputation has taken a hit, according to brand intelligence service firm BrandIndex. Its stock price, meanwhile, has fallen more than 19 percent this year.

Related: GM stock is cheap but still not a buy

Consumers, however, don't appear to be batting an eye. GM's most recent auto sales figures for April show them increasing 7% and beating analysts expectations. These results seemed to confirm what CEO Mary Barra had said in late-April, that the recalls had not been meaningfully impactful to sales. In addition, an auto industry benchmark for future car values, ALG, reports GM's cars will not experience significant hits to their resale values by their calculation.

Related: Mary Barra’s strong leadership will lead GM beyond recall drama

So why don't the recalls deter conumers when it comes to buying a car from GM? In the accompanying video, Yahoo Finance Senior Columnist RIck Newman reveals the answers and tells us what's next in the GM safety recall saga.

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