Last week’s recall by General Motors of 1.14 lakh Tavera vehicles sold by it in India between 2005 and 2013 flags off two important issues for the fast-growing automobile industry. First, the need for a mandatory vehicle-recall policy in the country and secondly, strengthening of vehicle testing and certification procedures. The automobile industry has grown tremendously in the last decade — 2.7 million cars, 13.8 million two-wheelers and about 8 lakh trucks and buses were sold in 2012-13, making India one of the world’s biggest automobile markets. As with any rapidly growing industry with multiple players, there is tremendous diversity in brands, categories and models making it all complex not just for the consumers but also for regulators. And as is always the case, regulation has failed to keep pace with the explosive growth. The Tavera case is only the latest in a spate of recalls by well-known manufacturers such as Honda, Maruti, Toyota, Ford and Renault in recent times. Anticipating pressure on itself, the automobile industry adopted a voluntary code of recall last year. After all, a defective vehicle affects the brand as much as the buyer and it is in the manufacturer’s interest to recall the vehicle and correct the defect. Yet, it is also true that such a critical aspect that involves safety cannot be left to self-regulation.
It is, therefore, time for the government to frame a comprehensive policy for vehicle recall. As part of such a policy, it should create an online database of vehicle recalls in the country that sets out the reason, the defect and the solution for the benefit of consumers. The U.S., which has a mandatory recall policy, has such a website which not only details all motor-vehicle recalls but also allows buyers to report technical defects that could be a potential safety issue. The policy should also prescribe strict penalties for recalls that arise from negligence or a deliberate attempt to cut corners due to competitive pressures, as was the case with Tavera. In a strict technical sense, the Tavera episode cannot be termed a recall; it is more about how the company deliberately misled the certification authorities about the vehicle’s emission standards. It was not about a faulty part or component. Even as the government investigates GM, it is clear that we need a comprehensive review of testing and certification norms. If required, institutions such as the Automotive Research Association of India — which is responsible for homologation and certification of new vehicles — and the National Automotive Testing and R&D Infrastructure Project that offers vehicle testing facilities, must also be strengthened.
