Auto Companies Who Do Not Recall Vehicles Will Be Penalised

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Automobile companies who do not recall vehicles even after clear evidence of safety defects could face penalty in India, starting October 1, 2016. The rule is in the making and the bill will be submitted in the next session of Parliament.

The Indian government could also launch a nodal agency that could launch its own investigation and ask the government to recall a particular model if needed. Unlike markets such as US, Europe, and Japan, India has no mandatory recall policy.

Instead, India automobile makers follow a voluntary recall policy. The policy was adopted by the Indian government back in 2012 and ever since it came into existence, carmakers have recalled over 20 lakh cars to repair seat belt issues, airbag defects, and brake line problems.

According to the new proposal, the nodal agency will monitor the recall process and also audit it. According to the draft, the government could order manufacturers to recall vehicles if a certain percentage of buyers complain of a safety defect.

The new bill will implement strict rules to deal with safety issues. Under the new draft, automakers will need to give at least 4 months to customers after a recall is announced to repair the vehicle and should also entertain customers for three years after announcing the recall.

The draft says "No penalty shall be levied in a case where the manufacturer voluntarily declares and undertakes a safety recall with due diligence. If the manufacturer fails to announce a safety recall where clear evidence is available as per the recall definitions, the Central government may issue appropriate directions and also impose appropriate penalty as per provisions of the Motor Vehicles Act, 1988 and the Central Motor Vehicles Rules, 1989."


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Story first published: Tuesday, June 21, 2016, 17:50 [IST]
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