A few examples of ‘safety defects’ covered under the code are steering components that malfunction, brake related defects, fuel system related components, wheels that crack or break, seats and seat backs, seat belts mechanism, wiring system problems that result in loss of complete lighting. Pitch finds out if the hullabaloo has any effects on the automobile industry.
“Why is there a big issue around recall? Recall is not a big deal, Rolls Royce BMW all have had recalls in the past, if there is a particular patch of parts that are damaged or might pose a threat which is minimal the owners are invited by the companies to bring in their cars and get them changed or replaced. For example when Maruti changed a metal of their car sometime back it was not due to any threat but the good will of the company,” says Murad Ali Baig, Automotive Expert.
If that is so then why bother having a code in the first place? Baig explains, “This code is basically brought about to bring everybody to line, in 99 percent of the cases the recall is to take precautions, the word ‘dangerous’ has been linked to it but usually it is completely the opposite. I think it is a great initiative by SIAM to promote the recalling act as there is no regulatory body that looks into this unlike foreign countries that have mandatory protocols.”
According to the new code of conduct, vehicles sold to customers that do not meet safety requirements due to manufacturing defect are to be considered for recall. Manufacturers will decide whether recall is necessary based on the nature of the failure after due analysis.
Shashank Srivastava, CMO, Maruti Suzuki, says, “Generally speaking, the recall code is nowadays a given fact by the manufacturers in countries other than India. It is a voluntary measure that most companies take to ensure that their cars are in a proper condition and ready to replace anything that went missing during the manufacturing process.”
Further, according to Srivastava, the cost of replacing parts during a recall is much less than the cost of a company losing its brand value and name. Everywhere it is taken as a good will measure and improves the brand equity. “In India there has always been speculation as there is no regulatory body nor are the consumers confident. This code will change that image. If there is a defect with the cars, ‘we will fix it’, is the attitude that is building up on this code and this will help consumers maintain confidence in the brand too,” he adds.
From the consumers perspective it is a good initiative as it will help them get accustomed to the international standards, this is the way a developing market should function.
SIAM spokesperson says that such a measure will increase the safety on the roads as earlier there was no policy framework and this code will bridge that gap. Now there is going to be a fixed format for every company and each manufacturer has to go through the rules, regulations and COP tests.
“Recall is a kind of up gradation, but in India it is not so, recall is to enhance the brand and show that they are strong as a manufacturer and as a company that cares about its customers. The Voluntary Code on Vehicle Recall is only for those auto manufacturers listed under SIAM and have been deeply involved in drafting this code,” the spokesperson appends.
The code has to be put into play to fulfill the objective it is meant for. Prabal Banerjee, Contributing Editor, Autocar India, agrees, “If SIAM does not penalise the players there will be no effect, the recall depends upon the brand equity, if the company has a high brand equity and recalls cars it will be forgiven but if a manufacturer has a low brand equity then the value in the eyes of the consumer will dip.”
In the past Honda has had to recall cars and so has Maruti Suzuki, both remain major players in the Indian market. The code seems to be a basic guideline for the companies listed with SIAM and it is expected that responsible marketers will not be pulled down by the move and accept it with greater sincerity towards the growth of the industry.
Moreover, this is one of the many initiatives taken by Indian auto Industry as a proactive step. In the past the industry proactively adopted Emission Warranty in July, 2001; Fuel Economy Labeling of vehicles at point of sale in January 2009 and Comparative Fuel consumption in July 2010.