On September 3, 2015, at an annual conference in the capital, Suzuki Motor Corp’s 85-year-old chairman Osamu Suzuki sounded a warning bell when he said that “the global recall of more than one million units of vehicles has put the focus on quality.”
He was, however, optimistic about the Indian market. “I believe if all suppliers follow quality in India, then they will be able to overtake the US and China.”
Little did anyone know at that time that two weeks later the global automobile industry would be hit by one of the biggest recalls in history, in the wake of a scandal that first rocked German car maker Volkswagen, and later made its effects felt across the globe. Europe’s biggest car maker admitted to rigging pollution tests with a defeat device in about 11 million vehicles worldwide. The fallout — it had to recall millions of cars worldwide.
The global effects of recall have been felt in India as well.
Between May 2012 and September this year, less than 1.1 million vehicles were recalled by 14 large and small automobile makers in the country., out of nearly 20 million vehicles sold every year.
Now just contrast this.
The number of vehicles recalled in the US hit a nine-year high of 21.9 million in 2013, according to the National Highway Traffic Safety Administration.
However, what is fascinating is that only one among the 14 companies that recalled vehicles in India in the last three-and-a-half years is Indian — Mahindra & Mahindra.
While domestic companies such as Tata Motors, Hero MotoCorp, Bajaj Auto and TVS Motor don’t feature in the recall list, their global counterparts, including Honda, Yamaha, Toyota, Ford, GM, Nissan, Renault and Hyundai, have been recalling products in India (see graphic).
On Friday, Honda Cars India recalled close to 4,000 units of its most popular City sedan to update a software for transmission system, as part of the car maker’s global recall campaign.
But the minimal presence of Indian auto makers in the recall list is less due to quality control and more because of the taboo associated with the word, analysts said. “Indian auto makers are not on the top of the quality metrics in all segments. Recall as a concept is an internationally well-accepted norm, but is relatively alien in India,” said JD Power’s India head Mohit Arora.
In contrast, global players such as Toyota, which produces cars in India through a joint venture with Kirloskar (TKM) have little compunction in recalling its products, despite being universally recognised for its manufacturing practices. “Recall is not a bad word. It is a consumer-friendly move,” said Shekar Viswanathan, vice-chairman & whole-time director, TKM. When Japanese parent Toyota Motor announced a massive 6.5 million recall earlier this week, the Indian arm said it was talking to Japan to see the impact.
But, things are changing.
“Recall was not happening in India earlier. But the market is maturing,” A GM India spokesperson said.
“Recalls are no longer taboo and showcase a manufacturer’s commitment to safety,” a Ford India spokesperson added.
And then, there’s also a policy issue in India.
Unlike other markets like the US, Europe or Japan, there is no legal compulsion in India to recall cars. The new road safety bill, which has a separate clause on recall, is still awaiting House clearance.