Column : Recall: the need for better regulation

Written by Yogima Seth | Updated: Feb 12 2010, 02:52am hrs
The Indian automobile industry is bubbling with robust sales, but a series of record vehicle recalls globally by Toyota and Honda, including some in India, has once again underlined the need for stringent vehicle regulation norms in India. Car penetration in India is just 10 cars per 1,000, because of which car manufacturers sense tremendous growth opportunities. Moreover, all manufacturers, including the countrys largest car manufacturer, Maruti Suzuki, are diversifying their product portfolio to cater to customers across all segments.

While this makes the industry highly competitive and has resulted in a large number of product options for any car buyer, we are yet to discover whether or not global car majors are compromising on quality in order to meet the rapidly growing demand for passenger cars in the country.

Surprisingly, they can afford to keep quality standards low on their priority list because despite some really big vehicle recalls in the country in the past, the government is yet to formulate a vehicle regulation policy to ensure that car manufacturers are legally bound to recall and repair vehicles faulty in manufacturing or design. By contrast, developed markets like the US, Europe and Australia have stringent norms to ensure auto manufactures take the responsibility for the defective vehicle. Even the Chinese regulation ensures that automakers are obligated to recall defective vehicles. Specifically, they must repair, replace or buy back the defective products and bear all related costs or pay a fine if they fail to recall or repair the vehicle.

This gains significance as Honda, on Wednesday, added another 4,37,000 vehicles to its 15-month-old global recall for faulty airbags in certain 2001 and 2002 Accord sedans, Civic compacts, Odyssey minivans, CR-Vs and some 2002 Acura TL sedans. A day prior to this, Toyota added half-a-million Prius and other hybrids to its highest ever recall.

Whether these models of Honda and Toyota in India are impacted or not is yet to be ascertained. But it is high time that the Indian government moved to protect consumers properly against any faults discovered in any of the cars in the Indian market.