India to soon get first vehicle recall code

ARAI all set to introduce Vehicle Recall Code under the Motor Vehicles Rule

With the rising number of vehicle recalls, the Automotive Research Association of India (ARAI), is set to introduce a 'Vehicle Recall Code', to be notified under the Central Motor Vehicles Rules.

ARAI  is a semi-official body, formed by the automotive industry and affiliated to the ministry of industry. India's 3.1 million automobile sales a year puts it among the top six markets in the world but the country does not have a recall policy. And, a number of vehicle makers -- Maruti Suzuki, Mahindra & Mahindra, Toyota, General Motors, Ford, Honda, Nissan -- have recalled a total of about 700,000 vehicles in the past two years in India.

The Society of Indian Automobile Manufacturers had announced a voluntary recall policy in July 2012, specifying that companies must follow standard procedures on detecting manufacturing defects.

"At present, vehicle manufacturers in India voluntarily initiate many recalls. The need arises whenever any safety defect is detected. A Vehicle Recall Code would lay down the procedure and obligations for managing these," said Rashmi Urdhvareshe, director of ARAI, to Business Standard.

Industry body Society of Indian Automobile Manufacturers (SIAM) announced the voluntary recall policy in July 2012, specifying that companies must follow standard procedures on detecting manufacturing defects.

According to Urdhvareshe, the code will have three types of provisions. Voluntary recall in which vehicle manufacturer voluntarily announces and manages the recalls, supervisory recall where close monitoring is necessary by the Nodal Agency and mandatory recall, which is based on account of field feedback, accident analysis or any other issue. Under the mandatory recall the nodal agency can order the manufacturer to recall the vehicles. Introduction of this code will bring in more consumer protection.

Though voluntary recalls have been happening both in India and globally, the issue for a framework was necessiated after General Motors India recalled 114,000 units in July 2013 of its multi-purpose vehicle Tavera, manufactured in 2005.

The US-based automaker, at the time, admitted to the government that an internal probe had revealed that its employees had violated testing norms and in order to meet specified emission norms, had re-fitted the already approved engines in the new Tavera models sent for inspection. The company also said the executives had tinkered with the weight of both the BS-III and BS-IV variants sent for testing to meet emission standards. The recall led to the removal of 20 employees across India and the US.

Unlike the developed markets such as Europe, Japan or the US, India still has no mandatory recall policy. The government is, however, in the process of framing a mandatory recall policy that could levy penalty in the form of fine or could even stop production. The policy, expected to be announced shortly, might require complete new legislation or an amendment to the existing Motor Vehicles Act and the rules framed under it.

According to industry experts, the current law is only regulatory in nature and takes care of the processes inside the factory but in the case of recall, the nature of offence is different.