Tuesday, 26 June 2012

Auto companies in India like Maruti, Toyota, Hyundai, Tata and Mahindra to set up recall code for defective vehicles

'Lemon Cars' is a pejorative for cars that carry a manufacturing and safety defect. Starting from as early as July 01, the car makers like Maruti, Mahindra, Hyundai, Toyota and Tata will come together to join hands and agree on voluntarily setting up a 'recall code' a norm that is institutionalised in all developed markets. With the new 'recall code', companies will require improved manufacturing processes to meet higher safety standards and will also result in better quality products.

The implementation of the new customer complaints on new cars would lead to faster and surer claims based on such engineering defects.Society of Indian Automobile Manufacturers (SIAM) members have decided to declare any defect or engineering flaw in vehicles on their own.

India, unlike its counterparts in Europe, US and Japan, is yet to put a statutory mechanism in force, which can strictly enforce corrective action from automobile makers for manufacturing flaws. In India, automakers are under no obligation to recall any vehicles till date, unlike their western counterparts, which is mandated across all major markets where notified entities ask for recalls and also levy strict penalties on manufacturers for any known violations.This new recall code initiative would be implemented from July 1, leading to a process whereby leading automakers like Maruti, Suzuki, Hyundai, TVS Motors, Tata Motors, Toyota, Volkswagen, Honda, Ashok Leyland, Eicher, Bajaj Auto, Hero MotoCorp and Mahindra & Mahindra would come forward to disclose any known defects or flaws in their vehicles to the public.

In developed markets, the norms are strictly implemented. For instance, on June 23, the American road authority, National Highway Traffic Safety Administration, investigating two customer complaints, forced American carmaker General Motors to recall 4.13 lakh units of its Chevrolet Cruze sedans over concerns of a possible fire through liquids trapped in the engine compartment.

The Indian government is yet to notify any similar law or mechanism yet, though it has proposed a National Automotive Board (NAB) with far-reaching powers to address automotive issues, including recall of vehicles.

Now this is one good law which will overall improve general perception of Global OEM's in India and will attract investments if sustained and more such laws implemented of global standards.


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