Auto recalls prompt quality concerns, regulation revision

Updated: 2010-07-03 13:53
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BEIJING - A string of recalls by some big-name car makers in the first half have fueled Chinese consumer concerns over quality and prompted the world's biggest auto market to lay down stricter recall regulations.

According to data from the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), China's quality watchdog, thirty-four recalls occurred in China in the first half, affecting 580,000 vehicles.

Several luxury and mid- to high-end automobile brands appeared on the recall list, including Lexus, Cadillac, Volvo and Lamborghini, raising questions about even their quality.

"I lost confidence in Toyota cars," said Xu He, a 26-year-old white-collar worker who shelved his plan to purchase a Vios following the Japanese auto maker's massive global recall early this year.

Just on Thursday, the company said another 270,000 cars sold across the world may have faulty engines in another quality lapse.

"Constant recalls have ruined Toyota's reputation. Despite fuel efficiency and competitive prices, I will probably choose another brand," Xu said.

However, some suggested consumers adopt a rational view toward the recalls.

Ren Yong, deputy manager of Dongfeng Nissan Passenger Vehicle Co, likened the recalls to pulling an "andon cord," a quality-control device placed on production lines to halt production when a problem occurs.

"We should not criticize car makers for their recalls too much. After all, they pulled the andon cord. That's much better than the companies which do nothing to address safety problems," he said.

Hui Boyang, deputy director of quality management at AQSIQ said: "Recalls, albeit unpleasant, protect consumers' interests and reveal a company's integrity."

But some companies' recall policies have triggered complaints among Chinese car owners.

In Toyota's massive global recalls, the auto giant ordered its US staff to visit affected users and help drive the problem vehicles to its garages and offered owners temporary replacement vehicles for free.

The company reimbursed the travel expenses of the car owners who drove to its outlets. It also unveiled compensation plans for affected customers.

But in China, customers had to drive to the designated repair workshops themselves and received no economic compensation at all.

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Zhong Shi, an independent car industry analyst, said: "Such different policies are partly due to the fact that China's recall regulations are not strict enough."

China issued Regulations on Defective Automobile Products Recall in March 2004 to strengthen quality supervision and enhance road safety.

It stipulated auto makers who refuse to recall defective products be fined a maximum 30,000 yuan ($4,441).

The penalty is so light auto manufacturers refuse to recall faulty vehicles, Zhong said.

The regulations have other loopholes, too.

One problem is that the regulations fail to stipulate how a car maker must compensate customers if defective products cause injury or economic loss.

China is revising its recall regulations and the new version is expected to be issued within the year, Friday's Shanghai Securities News quoted a source familiar with the issue as saying.

The fine faced by auto makers who refuse to recall their defective products will rise to 500,000 yuan, the source said.

"The new regulations will strengthen auto makers quality control.That's definitely good news for consumers," Zhong said.