Recall norms tightened for auto cos

Automakers will have to mandatorily recall a vehicle if a certain number of vehicle owners file a complaint against it on a vehicle recall website to be set up by the government. The road transport and highways ministry on Wednesday notified rules for mandatory recall of defective vehicles by the auto manufacturers to strengthen the cause of consumer safety and reduce road accidents in the country. The rules will come into effect on April 1.

A minimum of 100 complaints for three- and four-wheelers on the proposed portal, indicating similar nature of defects in a particular model, will be enough for the government to initiate the recall process, besides slapping a penalty up to Rs 1 crore on the manufacturer.

The minimum number of complaints required to initiate mandatory recall will range from 100 to around 1,250 for different categories of vehicle based on a model’s total sales.


“The manager of the Vehicle Recall Portal shall inform the designated officer under Rule 127C of the Central Motor Vehicle Rules, 1989, if the number of owners reporting an identical defect in particular motor vehicle...is equal to or more than the percentage for the category of the motor vehicle,” the ministry said in a notification.

“The portal will be set up and monitored by the transport ministry,” a senior government official said.

The new Motor Vehicles (Amendment) Act 2019 holds manufacturers accountable for exchange or repair of defective vehicles. Under the Act, the manufacturer has to either reimburse the buyer with the full cost of the motor vehicle or replace it with better specifications.

The Act also encourages manufacturers to initiate voluntary recall of defective vehicles by waiving off the financial penalty in such cases.

The penalty for selling defective vehicles in case the government orders a mandatory recall will be between Rs 10 lakh and Rs 1 crore, as laid down in the Motor Vehicles (Amendment) Act, 2019. As per an ET Auto report, automotive recalls due to potential defects doubled in three years to more than 300,000 vehicles in 2019.

Threshold for Complaints
The transport ministry in its notification detailed the threshold for minimum number of complaints required for initiating vehicle recall.

In the case of three-wheelers, cars and SUVs, if annual sale of a model is up to 500, 20% of sold units, or 100 complaints will be enough to initiate a recall. For vehicles with sales of between 501 and 10,000, 150 complaints will be enough, while for vehicles whose annual sales are beyond 10,000 units, 1,250 complaints have been set as the threshold. For two wheelers with annual sale of up to 3,000 units, a minimum of 600 complaints are required.