Bad news for auto makers: 100 customer complaints could force a model recall

Vehicle makers may no longer be able to hide behind ‘voluntary’ recalls when a particular model is found to be defective. As per the draft of the new Road Transport Safety Bill of 2014, if even 100 people complain to the Vehicle Regulation and Road Safety Authority about a particular defect in any car model, which could cause harm to vehicle occupants or road users, the Authority can order a recall on its own. Vehicle recall refers to the term where all vehicles sold by the original equipment manufacturer (OEM) that are found to contain a defect and the manufacturer offers to correct that defect without charging the customer.

In case the Authority does direct an OEM to recall a particular model, the OEM may also have to compensate customers in full. Till now, in the absence of any vehicle recall policy, passenger vehicle makers in India have been announcing selective recalls on a voluntary basis but there have been no reported instances of customers being compensated due to a manufacturing defect in any car model.

In May, Honda Cars India recalled over 31,000 units of its best-selling compact sedan Amaze and Brio hatchback to inspect them for a possible defect in the brake system. In July 2013, General Motors India recalled more than a lakh units of MUV Tavera for not meeting emission norms. Maruti Suzuki, Toyota, Ford and Tata Motors are among the other leading car companies that have recalled some of their leading brands in the recent past.

The draft RTSB bill is expected to be placed in Parliament in the Winter Session. It proposes the creation of a powerful body in the national authority mentioned above, which will frame rules and also monitor their implementation for making Indian roads safer. Minister of Road Transport and Highways, Nitin Gadkari, has set a target of reducing road fatalities by 20 percent each year and by 2 lakh within five years.

There are many interesting proposals in the draft bill. For example, it wants children to wear helmets, it suggests road worthiness tests for all cars and two wheelers every five years. The draft also proposes provisions to not only ban the use of hand-held mobile phones while driving but also hands-free devices.

Other suggestions like rear seat belts in all new cars (as of now, it is mandatory to wear seat belts only for the driver and co-passenger in front seats), could mean vehicle makers charge more. The draft mentions a new car assessment programme and crash test norms for cars being sold in India,

Some other proposals of the draft policy:

1. Time-bound vehicle type approval to promote innovation: This may help car makers in faster vehicle and tech upgrades and cost you less while purchasing spare parts

2. Transparent, singe-window licensing system: Gadkari has spoken of abolishing Regional Transport Offices (RTOs) in the recent past but ministry officials say RTOs’ interaction with the public for licensing will be minimised. Either way, it is a good move.

3. Impetus for BRT and intra-city transport: The Bus Rapid Transport (BRT) corridor failed miserably in Delhi because of massive lobbying by the car industry. Will the new Act be able to withstand these kind of pressures? Any move to enhance intra-city transport is welcome though.

4. Multi-modal integration, provisions to prevent goods’ vehicle overloading: Gadkari has earlier spoken about getting weighing bridges constructed so that overloading can be stopped. If implemented, again a welcome move.

5. Provision of cashless treatment for all road accident victims during ‘Golden Hour’: Coupled with another provision, which seeks to provide mandatory insurance to all road users through a dedicated accident fund, this is a welcome provision. The draft bill proposes setting up a Motor Accident Fund for this purpose.