 "Massive recalls plague Indian car market")
The current financial year started with German carmaker Volkswagen recalling over 3,800 units of Vento to fix an emission issue. Since then, recall of another 188,000 vehicles has been announced.
In the last 10 days, the country’s largest carmaker Maruti Suzuki has announced two recalls. Last week, 20,427 units of the S Cross were recalled to fix a faulty brake part. On Friday, the company said it would recall 75,419 units of its premium hatchback Baleno to upgrade the airbag controller software. These airbags were procured from Swedish component maker Autoliv. Maruti will also recall 1,961 units of compact sedan Dzire to replace a faulty fuel filter. Of the 75,419 Balenos being recalled, almost 16,000 diesel variants will also be inspected for a faulty fuel filter, followed by a replacement, if needed.
Interestingly, the Balenos being recalled also include 17,231 units that were exported to markets in Europe and Japan. The local distributors in these markets will facilitate the recall and replacement. Both S Cross and Baleno were launched in FY16 and are being sold through the company’s premium retail network Nexa, which was launched last year. Almost every unit of Baleno manufactured and sold in the domestic and export market is being recalled. The hatchback enjoys a waiting period of up to three months.
Between April and May, US carmaker Ford had announced recall of almost 91,000 units of EcoSport, Figo and Figo Aspire to address different issues.
The increasing recalls point to the inconsistencies in the quality of parts supplied by component manufacturers as carmakers squeeze them to cut costs. R C Bhargava, chairman at Maruti Suzuki, said a recall is not totally avoidable as thousands of components are used to manufacture a vehicle. “There are possibilities of error as several component makers are involved. There are challenges in ensuring consistent quality supply from the tier-II component makers. Because of their small size and limited financial ability, these suppliers struggle to maintain quality in the event of rising production. We need to work towards upgrading the quality standards of small vendors,” he said.
“It is an unnecessary headache,” said Bhargava.
Recalls are not new to India, the fifth largest car market. Maruti Suzuki did its first recall in the 1980s. Most manufacturers now voluntarily announce a recall. Globally, top companies like Toyota, Honda and Volkswagen have announced recalls of millions of cars.
“Currently, product recalls are largely precautionary towards ensuring desired stated quality. Customers are aware and take the recalls as corrective process towards ensuring a trouble-free product and thus most of them do not attach a stigma to it, rather many times it works positive and their confidence in the brand goes up,” said Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai.
A recall does not impact future sales of vehicles. Take the case of Maruti Swift and Dzire where recall happened in April 2014. Dzire and Swift have been the top selling models in the country for past two years.
Automakers say there are quality issues with products in sectors like electronics and consumer durables in the country but no manufacturer recalls a product. A customer should feel more comfortable that carmakers are doing voluntary and free recalls, said an industry official.