You are here: Home » Companies » News
Business Standard

Car makers upset over new safety draft proposal

Though India is among the top six markets in the world, the country does not have a recall policy

Swaraj Baggonkar  |  Mumbai 

Integrated safety image via Shutterstock.

The recommendation to empower the proposed National Authority for Road Transport and Safety to force recalls has not gone down well with car makers.

All automobile makers have conveyed their concern to the Society of Indian Automobile Manufacturers (SIAM) over a proposal that permits recall of a vehicle if 100 or more buyers report it to the authority.

"The industry will need more discussions on the proposed draft because that is not the right number (100). Manufacturers have to be responsible and work closely with the SIAM and other bodies," said Sumit Sawhney managing director and chief executive, Renault India.

India’s 3.1 million automobile sales a year put it among the top six markets in the world, but the country does not have a recall policy. Recalls are voluntary according to a code drawn up by SIAM two years ago. More than 700,000 cars have been recalled by Maruti Suzuki, Mahindra & Mahindra, Toyota, General Motors, Ford, Honda and Nissan in the past two years in India.

"The National Authority shall have the power to order a recall of all the motor vehicles of a particular model where a defect has been reported by a hundred or more people which may cause harm to the driver or passengers," states the draft bill prepared by the transport ministry to replace the Central Motor Vehicles Act.

The draft also has provisions for compensation to buyers for the full value of the vehicle and replacement of a defective vehicle with another one of similar or better specifications.

The SIAM, which preparing a report on the issue, argues that the authority to recall cars lies with manufacturers and not with governments or buyers anywhere in the world.

"If the bill is approved in its current format bogus cases of faulty vehicles will shoot up. One cannot replace a car for a faulty switch. Nowhere in the world will you find a recall done by someone other than the manufacturers themselves," a SIAM functionary said.

The bill, expected to be tabled in the winter session of Parliament, will be on the lines of laws in the US, UK, Canada, Japan and Germany.

Michael Mayer, director of passenger cars at Volkswagen India said, "If car makers are responsible, the critical thing to maintain is the quality of their products. They will take the necessary steps. If you look at Europe or the US, all responsible car makers do that without the need to be caught."

Manufacturers said the government should rather focus on improving road safety. More Indians die in traffic accidents than in natural calamities. "With mass motorisation this problem will get more evident. These thing are much more relevant than any technical recall of cars. The government has got the focus wrong," Mayer added.

Car makers are confident their view will be taken into account before the bill is tabled. Pawan Goenka, executive director of Mahindra & Mahindra, said, "Dialogue is on between the industry and the ministry."

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, October 18 2014. 21:03 IST