SIAM launches voluntary code of vehicle recall

July 2, 2012: In a bid to increase road safety standards in the country, the Society of Indian Automobile Manufacturers (SIAM) has launched a voluntary code on vehicle recall enforceable from July 1. Put into place after consensus with member automobile companies over a year and a half, the code places the onus on the manufacturer to recall a defective vehicle be it a two-wheeler, passenger car or a commercial vehicle. For CBU imports, the concerned importers will be responsible for the enforcement.

According to SIAM president S Sandilya, the code has been developed after studying the regulations existing on vehicle recall worldwide. Only the USA has provisions for taking punitive actions against defaulting companies, he said. The voluntary code on vehicle recall will address potential issues that exist in a motor vehicle that do not meet safety requirements due to a manufacturing defect as well as remedial actions taken to set it right. The vehicle will be covered under safety recall for a period of 7 years and will target the first buyer. The decision on recall will take into account the degree of seriousness or severity of occurrence of any possible hazard involved.

Examples of safety-related defects which fall under the code, according to SIAM, are:

• Malfunction of steering components that cause complete loss of vehicle control.

• Defects in the braking system which cause significant loss of braking function.

• Malfunction in fuel system-related components that result in unintended fuel leakage or unintended acceleration

• Cracked or broken wheels that result in loss of vehicle control.

• Failure/malfunction of seats, seat backs, seatbelt mechanism or head restraint system that exposes the occupants to immediate danger.

• Problems in the wiring system that result in loss of complete lighting.

According to the voluntary code, the manufacturer will have to display the recall information on its company’s website and the communication will also be sent to the vehicle owners. Besides, SIAM and the concerned government ministries like Heavy Industries will also display the information of the recall. Sandilya said that SIAM is still in the process of talking to concerned ministries about it.

The defective vehicle, on the other hand, will be rectified by the manufacturer through its dealers free of cost for the customer. Importantly, the responsibility for the defective component lies not with the component manufacturer but the vehicle manufacturer and does not affect the aftermarket.

In case the vehicle manufacturer fails to announce recall or rectify the damaged part where clear evidence of a material or design defect is visible, the Union government will have the prerogative to initiate punitive action against the defaulting company that could include imposing financial fines or penalising the OEM further in case of deaths due to accident, said Sandilya.

Code worked out in consultation with government

SIAM has launched the voluntary code of recall to align itself with technical global regulations and to spell out the guidelines for recall in the absence of any structured framework at present.

The voluntary code works on the premise that if the manufacturer fails to take action on defective vehicles, it will impact the company’s image and market demand substantially. Moreover, cost of parts and labour in rectifying the vehicle defect would itself hike costs for the OEM.

“SIAM will not be a regulatory authority and will only ask the automobile companies why they are not complying with the voluntary code. Only the government has the prerogative to take appropriate steps against the company,” added Sandilya. He added that the code had been worked out in consultation with the government so there would not be a difference of opinion with the concerned ministries on it.

But in case the government draws up an alternative mandatory code on vehicle recalls, SIAM would react to it at the appropriate time.

Meanwhile, in 1988 the Sundar Committee that had been appointed to recommend modernisation of the Motor Vehicles Act (MVA) had failed to suggest a formal ‘auto recall policy' or an administrator for it but had instead recommended punishment for offences related to manufacture of faulty vehicles. This penalty included imprisonment of up to three months or a fine of up to Rs 1 lakh.

Among OEMs in India, Maruti has had 8 to 9 recalls since the 1990s. This includes about 100,000 units of the A-star hatchback being recalled due to a fuel tank issue in 2010. Tata Motors had also offered a free fix on over 70,000 units of the Nano following instances of fire, but abstained from calling it a recall. Toyota had recalled about 40,000 Etios models for defective parts in India as well.

Sandilya added that reasonable volumes of vehicles with manufacturing or design defects should be present to draw a vehicle within the voluntary code. He however did not confirm the exact number of vehicles.

SHOBHA MATHUR