Rising recalls: New law, media scrutiny

Updated: 2013-01-07 08:08

By Han Tianyang (China Daily)

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Rising recalls: New law, media scrutiny

Car service in Haikou. About 3.2 million vehicles were recalled last year, nearly double the number in 2011. [Meng Zhongde / For China Daily]

Yet domestic carmakers continue to be reluctant

As the auto market continues to expand and mature, the number of recalled vehicles in China has increased significantly over the past few years to hit a record high in 2012.

According to statistics from General Administration of Quality Supervision, Inspection and Quarantine - the nation's quality watchdog - about 3.2 million vehicles were recalled last year, nearly double the 1.83 million vehicles recalled in 2011.

The number of recalls spiked in March, October and November, showing that increasing media attention and stronger enforcement are driving automakers to acknowledge defects.

March 15 is consumer rights day in China, and for the entire month the media are traditionally more active in investigating and exposing faulty products. At that time of year, automakers are not as hesitant as usual in vehicle recalls.

A new regulation passed by the State Council in October helps explain rising recalls that month and in November. The new law greatly raised fines for automakers found to hide defects and avoid recalls. The heaviest penalty is loss of production permits.

Rising recalls: New law, media scrutiny

The government is also working to enhance its technological strength in supervising recalls.

The China National Institute of Standardization, a part of the quality supervision administration, is now preparing a national-level laboratory to study automobile defects.

Last month, the institute signed an agreement with the Beijing Products Quality Supervision and Inspection Institute to join forces in building the lab.

With the new law formally taking effect on Jan 1 backed by better technological means, the number of recalls and affected vehicles are both expected to increase further in the coming years.

In the US, which is recognized as having the world's most effective recall system, the annual number of affected vehicles has been well above 15 million from 2009 to 2011.

The single biggest recall made in China last year was from Toyota.

The company recalled nearly 1.4 million vehicles - including both imported and locally made models - in October due to defective electric window switches, part of a massive global recall of 7.4 million vehicles.

Toyota appeared to have learned a lesson from three years ago when it reacted slowly in China with its global recall of vehicles with faulty accelerator pedals. The subsequent furor resulted in its CEO flying to Beijing to apologize.

Toyota is not the only foreign carmaker to use a different standard for the Chinese mainland and other overseas markets.

Last March, German automaker Volkswagen announced it would offer a free software upgrade in the mainland market for vehicles equipped with the company's much-vaunted direct shift gearbox after consumers complained about problems with power loss and shift failure throughout the previous three years.

But it did not recall the vehicles. The company moved to solve the problems, but it avoided using the word "recall". Instead, its announcements used the phrase "customer service".

In contrast, Volkswagen had recalls in the US and Germany over its DSG transmissions in 2009. And last month it started to recall its vehicles equipped with the seven-speed DSG transmissions in Taiwan to update software to solve problems that are similar to those reported in the mainland market.

Domestic carmakers are even more reluctant to initiate recalls. The trend continued in the past 12 months, when few Chinese carmakers recalled vehicles.

According to information on the quality watchdog's website, only five domestic companies - Geely Automobile, SAIC Motor Corp, Zhengzhou Yutong, Xiamen King Long and Great Wall Motors - recalled vehicles last year.

Geely announced a recall of about 55,000 vehicles last September due to potential risk of fuel leak, and later expanded the recall to cover more than 255,000 vehicles, the biggest recall ever made by a domestic carmaker.