Recall policy to be implemented by Govt soon

By 2016, India would be in the top 5 car markets in the automobile industry globally. Due to this, Government is now looking into framing a new policy called ‘auto recall’ in hopes of improving the standards in manufacturing in India. The details were disclosed by a Govt official.

Joint Secretary, Ambuj Sharma, Heavy industries Department, told they were in the process of forming NAB (National Automotive Board), which is already in progress and would be formed in a couple of months or more. This would enable the board to take necessary actions on recall of vehicles.

Ambuj Sharma says they were examining NAB’s prospects and ongoing discussions regarding guidelines and methods to adopt have started. They were also considering the possibilities of penalizing a manufacturer if a recall happens; however, no specific timeframe was given.

Recall policy to be implemented by Govt soonAmbuj Sharma says the NAB would have representatives from all nodal ministries and automotive bodies including ARAI (Automotive Research Association of India).

Sharma tells recall policy would need to under MVA (Motor Vehicles Act) as the policy would require opinions from transport related facilities in India.

Another Heavy Industries Department official told the initiatives adopted by Government in the introduction of the new policy was much similar to that one in the United States of America where it entails a manufacturer to publicly announce a defect if confirmed.

The SIAM, however, wasn’t informed of the ongoing development of the policy.

The policy yet to be reinforced by the Government comes in the wake of home grown manufacturers adding safety features in India to their existing bikes or cars due to persistent complaints from consumers, and these actually do not come under the recall policy.

Last November, Tat did try to install more safety features for their Nanos recalling 70,000 cars only if customers wanted the features due to the Nano catching fire. There are 6 incidents reported like this since the launch of the Nano and Tata confirms that these efforts by the company do not come under the recall policy.

Mahindra & Mahindra known for their Scorpio fame entered the bike segment last year in September when they introduced the Mahindra Stallio 110cc. They had to eventually stop its production as some parts needed to be fine tuned including adjustments made to some bikes, which were already on road.

Reportedly, there are plenty of such incidents in India at the moment. Honda recalled its City sedans twice in one year.

India’s biggest car manufacturer, Maruti too did recall its diesel cars to be checked and replaced for a fault in the engine, and the company has done this twice in one and a half years. Analysts feel markets would grow more matured if such a move is made; however, doubted customer acceptance.

A senior analyst says recalls so far have faced both negative and positive impacts. He says the perception of customers on such moves in India would be negative while in global markets it was just the opposite. Customers globally accept such moves by the manufacturers and are happy to know manufacturers keep an eye on products sold some years back.

The expert says the Indian market was changing in that it would give all the rights to a customer to get back to the manufacturer and shoot questions regarding any defect found.

Open arms welcome for the Union budget by automobile industry

The nervousness from the automobile industry regarding the budget has vanished with the Pranab Mukherjee formulated budget. Most of the automobile manufacturers have commended the excellent budget proposal, especially favoring the Indian automobile industry. Many patriarchs from the company have already raised the toast for this budget.

Amongst the slew of budget praisers are General Motors India MD, Karl Slym and Bajaj Auto MD Rahul Bajaj. The former has openly said that the entire GM family is elated with the budget proposal as its incorporates the welfare of the Indian public by concentrating on the agricultural part, industrial as well as the automotive part. The decision of the Government not to raise excise duties is a welcome move since many were of the opinion that the budget would bring about an increase in the price of cars by this month. He also praised the R&D initiatives and incentives that the government is taking for developing green vehicles. Bajaj Auto MD said that the demand for bikes would now increase since the prices would remain the same for a few more months until rising input costs take over the sensibilities of the finance planners in all the companies.

Snippets from Union Budget 2011

Some of the news percolating from the Union Budget 2011 is as follows. Contrary to popular belief, the excise duties haven’t  been revised and they are still, very much the same. For the one not in the know, the excise duty will still stand at 10% for small cars whereas for the bigger ones it would be 22%. As expected, the budget states that special incentives should be given for the Electric Vehicles as well as Hybrid ones. This eco-friendly measure is sure to be welcomed by many.

Even for the battery technology that these EV manufacturers would be importing, there would be no customs duty and also a Central Excise Duty concession. In a bid to promote the LED usage, excise duty on the same has been reduced to 5 %. LEDs consume less electricity as also are more durable as regards their life span. For any other vehicle using fuel cell technology, there would be a concessional excise duty figure of 10% only. This should boost the morale of the auto industry which was looking forward for a huge hike in the stakes.