Carmakers may be fined up to Rs 1 crore for not recalling defective units

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When a manufacturer releases a product to the public, they are responsible for any defects or overlooked issues. These could be minor, causing an inconvenience or dangerous to consumers and their safety. The problem could affect a few thousand units or millions but the proper solution has to be taken out.

Following the same the rule for testing of vehicles and mandatory recall under the Central Motor Vehicle Act has been notified by the transport ministry which will apply for the penalty in case manufacturers or importers fail to undertake a voluntary recall. The fine has been set from Rs 10 lakh to Rs 1 crore if the companies fail to recall.

The ministry of road transport and highways on March 17 issued a new set of guidelines for the recall of defective vehicles by automobile manufacturers to be effective from April 1, 2021. As part of the new guidelines, the government has asked automobile companies to recall vehicles in case the number of complaints about a defective part in a particular model rises beyond a specified number.

The ministry had issued a draft notification for vehicle recall policy mid-last year. A portal will be up and running for such vehicle recalls where consumers can lodge their complaints related to various issues. The new rules are part of the government’s plans to increase safety standards of vehicles in the country. In 2020, recalls made by auto firms to repair potential vehicle defects hit a four-year high with nearly 3,80,000 recalls recorded in the year.

The government is also currently finalising the threshold to trigger the recall. This new information should be notified soon by the government. For instance, in the case of a car, if the sales are up to 500 units annually then 100 complaints from the sold units will be enough to initiate the recall process. If the annual sales are between 501 to 10,000 units, then the number of complaints should be at least 1,050 to initiate the recall. If the manufacturer is selling more than 10,000 cars annually, then the complaint number is set to at least 1,250.

A similar type of formula is under works for the three-wheelers, two-wheelers and even quadricycles. Soon there will be a uniform formula for other categories also which will include buses, trucks and other large passenger-carrying vehicles. For such vehicles, the complaint number will be set to 3% of the annual sales of the vehicles to trigger the recalls.

As mentioned above,  the vehicle owners would be able to register and lodge their complaints on the portal (which is yet to be developed). Based on these complaints, the notices will be sent to the respective automobile manufacturers. The manufacturer will have 30 days to respond to the complaints. Based on this response, the designated agency will classify if the vehicle is classified as a “defective motor vehicle” before issuing a mandatory recall.