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Rediff News  All News  » Business » It's mandatory recall policy or penalty for automakers soon

It's mandatory recall policy or penalty for automakers soon

August 02, 2013 13:01 IST

CarsWith an increase in the number of recalls by automobile makers, the government will soon come out with a mandatory recall policy that could levy a penalty, either in the form of a fine or even stoppage of production, on companies.

The policy, in the works within the government, might require a new legislation or amendment to the existing Motor Vehicles Act and the rules framed under it.

A senior government official told Business Standard the policy would supersede the existing voluntary recall policy framed by the industry.

“A legislation may be required for specific penalties. The current law is only regulatory in nature and takes care of processes outside the factory but in the case of recall, the nature of offence is different,” said the official, who did not want to be named.

The government action has been prompted by General Motors India recalling its 114,000 units of multi-purpose vehicle Tavera, manufactured since 2005.

The US-based auto maker has admitted to the government that an internal probe had revealed employees of the company violated the testing norms, and re-fitted already approved engines in new Tavera models sent for inspection to meet specified emission norms.

The company also said executives had tinkered with the weight of both the BS-III and BS-IV engines variants sent for testing to meet emission standards.

The recall led to the dismissal of Sam Winegarden, GM’s vice-president for global engine engineering and India chief financial officer Anil Mehrotra, among 20

employees across India and the US.

The National Automotive Board will oversee implementation of the proposed policy.

The Union Cabinet had approved the board’s formation last year.

It is expected to start functioning in six months.

The Automotive Research Association of India, the International Centre for Automotive Testing and the National Automotive Testing and R&D Infrastructure Project will be involved in carrying out the checks.

Unlike the present recalls that are voluntarily done by automobile companies, under the new policy, the government can do test on in-use vehicles either of its own accord or based on complaints and accidents.

The check could be at the dealer end or on road. Penalties would be imposed even if the recall is voluntary.

Besides, a time frame would be set for fixing the defects.

The government has also set up a committee under the chief executive officer of Natrip, Nitin Gokarn, for investigating the Tavera recall.

“The committee will find the loopholes in the testing procedure adopted in this case and whether there was neglect, ignorance or human design in the process,” said the official.

The current procedure involves random check on three to 32 vehicles during manufacturing.

The committee is expected to submit its report in another fortnight. Companies such as Ford Motor Co, Renault SA, Honda Cars India, Mahindra and Mahindra and Yamaha Motor Co have recalled more than 300,000 vehicles in India since the industry body, Society of Indian Automobile Manufacturers (Siam), announced a voluntary recall code in July 2012.

Jyoti Mukul and Sharmistha Mukherjee in New Delhi