Maruti Suzuki, the country’s largest car producer, today admitted that it has recalled all the 100,000 A-Stars manufactured before August 22, 2009 to replace faulty components that could cause fuel leakages. The A-Star was launched in November 2008 and the recalls began in December.
This is the largest recall by an Indian automobile maker, with Maruti surpassing its own record of recalling 76,000 Omnis in 2001. Maruti earlier recalled its hatchback Swift in 2005 to change bolts to reduce the front suspension noise in Swift petrol and in 2007 electronic control units of the Swift diesel. It had also replaced speedometers in M800 and Omni in 2008.
Sixty per cent of the A-Star recalls were sold in global markets, the rest from domestic customers.
So far, the car manufacturer has replaced a faulty fuel pump gasket and an O ring in about half the 100,000 units it has recalled.
Depending on whether they are imported or domestically manufactured, the two components cost Rs 400 to Rs 500, according to service stations, and therefore will not impose a major financial burden on the company.
A press statement from Maruti, which expects to end the current financial year producing a million cars, said the defective components were discovered during a monitoring and feedback exercise conducted in November last year and the company started contacting customers through letter by December.
The press statement explained that the problem of leakages arose when the fuel tank is filled to the brim, beyond the cut-off mark owing to faulty gaskets. It clarified that "no problem has been reported by customers".
The news had an immediate impact on the company's shares on the Bombay Stock Exchange, with the scrip falling to an intra-day low of Rs.1,320.25, to log a loss of 4.4 per cent, before gaining some ground to close at Rs.1,336.85, down 3.24 per cent.
The A-Star, which is manufactured at Maruti's Manesar plant in Haryana, is exported to 69 countries. Till December 31, Maruti had sold over 100,000 A-Stars overseas.
In fact, the A-Star is Maruti's largest export model and India is its sole production base for this model. Europe, where it sells under the Alto brandname, accounts for a third of total sales of the model. Maruti also has an agreement with Japan's Nissan to export 50,000 A-Stars a year, also to Europe, under the Pixo brand.
|A-STAR IN TROULE|
|# Recall for A-Stars manufactured before August 22, 2009|
|# 60% of recalls for cars sold overseas, mainly Europe|
|# Cars had faulty fuel gasket and O ring|
|# Defects detected during monitoring & feedback exercise in November, 2009|
|# Maruti has replaced faulty parts in about half the recalled cars so far|
|# Maruti has produced 130,000 A-Stars between April 2009 and January 2010|
Sources in Maruti said the company had sold 130,000 A-Stars between April 2009 and January 2010, which account for nearly 16 per cent of total sales.
The finer engineering details of the car were worked out at Suzuki's research and development centre in Japan, a substantial portion of the vehicle was developed in India. The A-Star is developed on a fully new platform and is fitted with a completely new engine.
Maruti's recall exercise comes closely follows some large global car recalls from car companies recently. In January this year Toyota Motor Corporation recalled nearly 9 million cars across eight models while Honda Motor Company pulled back close to 1 million units of its models.
In India, Honda Siel Car India had also announced that it would recall about 8,500 units of the City to replace a defective switch on January 30. Tata Motors also recalled about 40 Land Rovers, a few months ago for problem in the brake system.