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Govt red-flags auto companies' recall policy
Posted on 02 Jul 20122,250 Views Comments
Voluntary policy will make auto makers not liable for penalties in case of generic defects, fears the government
If the auto industry had its way, companies would pay no penalty when a car is recalled for generic defects and such a recall may not be mandatory even. A senior official said the government is set to red-flag the proposed guidelines drawn up by the auto industry lobby, which is "voluntary" and bereft of penalties at the same time.
A high-level meeting later this month, to be attended by various ministries involving the auto sector, is likely to discuss a structured, and statutory, policy for car recalls. The Society of Indian Automobile Manufacturers (SIAM) will unveil its voluntary code on Monday.
SIAM's code will not impose any penalties on car companies, even in case of known violations. Rather it would "expect" members (car companies) to voluntarily declare generic defects if any. This is in contrast to the regime prevalent in countries such as the United States, Japan and South Korea, which have strict regulations on recalls and specialized bodies looking into them. Toyota, for instance, faced the heat from the National Highway Traffic Safety Administration of the US in 2010 over unintended acceleration in its cars, forcing the Japanese maker to recall around four million vehicles. "This (SIAM's move) will serve no purpose as it has often been found that companies are not open to admitting faults when it is based on self-regulation," an official said. Also Read: Car makers to set recall code for defective vehicles in India
The government's fears on a lax recall policy - when it is voluntary and self-regulated - are not unfounded. While strict regulations have made car recalls a healthy practice in the west, where companies call back vehicles whenever the defects are generic in nature and potentially harmful for drivers, the same is not the case in India.
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